Which of the following statements about contingent assets and contingent liabilities are correct?

1. A contingent asset should be disclosed by note if an inflow of economic benefits is probable. 2. A contingent liability should be disclosed by note if it is probable that a transfer of economic benefits to settle it will be required, with no provision being made. 3. No disclosure is required for a contingent liability where it is possible that a transfer of economic benefits to settle it will be required.

4. No disclosure is required for either a contingent liability or a contingent asset if the likelihood of a payment or receipt is remote.

a) 3only,

b) 1 and 4 only,

c) 2 3 and 4,

d) 1 2 and 4

What is the appropriate treatment for Case 1?

		Contingent Liability - Disclosure
		Provision Required
		Contingent Asset - Disclosure or no action required
		Contingent Asset - Provision required

What is the appropriate treatment for Case 2?

		Contingent Liability - Disclosure or no action required
		Provision required
		Contingent Asset - Disclosure or no action required
		Contingent Asset - Provision required

What is the appropriate treatment for Case 3?

		Contingent Liability - Disclosure or no action
		Provision required
		Contingent Asset - Disclosure note
		Contingent Asset - Provision require