agree or disagree

Contingent liabilities under the U.S GAAP and IFRS are reported under each specific source. Such as for the U.S. GAAP has ASC 450 and ASC 460; and the IFRS has IAS 37 which defines and specifies accounting filing. Under the GAAP a contingent liability is broken down into a category of high, medium, and low probability to determine the chances of the liability happening. Under IFRS a liability is defined as a present obligation that comes from past events which builds off their similar concept to the GAAP. Both subjects recognize a liability as ''probable'' but when it comes to measuring the losses; GAAP uses the minimum and IFRS goes for the median of the range.

Recovering a contingent loss from the IFRS requires a settlement and that a certainty is present to proceed with a refund. The GAAP considers a refund when, heres the word again, a ''probable'' claim is recognized in the financial books. Both are very similar but just are worded different but one is written and the other is deemed as a possibility. The GAAP will not discount unless it is a fixed liability but it is also a policy choice and instead of a requirement. As for the IFRS, cash flow is discounted via pre tax and evaluated by current market value. After it is all said and done and it is time to restructure the claim, the GAAP will bring the claim to its fair value while the IFRS will estimate to the best estimate of the direct costs.