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Imperial Ltd is the guarantor to the bank for a loan taken by its associate company of $50,000. The likelihood that Imperial Ltd will be

Imperial Ltd is the guarantor to the bank for a loan taken by its associate company of $50,000.

The likelihood that Imperial Ltd will be called to pay the loan amount is remote.

How should the contingent liability be included in the companys financial statements?

a.Disclose by way of a note with no provision being made.

b. No disclosure or provision is required.

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