Examine Note 23 to Canadian Tire's financial statements. a. What is a contingent liability? How are contingent

Question:

Examine Note 23 to Canadian Tire's What is a contingent liability? How are accounted for?
b. Explain the information in the first paragraph of the note. Do you find this information useful? Explain. Why do you think the information is provided in this very general way?
c. Describe the situation in the second paragraph of Note 23. What would the impact on the be had the $24.4 million referred to been accrued on the How would it affect you as a prospective investor that the amount wasn't accrued, provided that it was disclosed in the notes? (Note: "The Bank" referred to in the note is the Canadian Tire bank, which is owned by Canadian Tire.)

Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...