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11 November, 09:30

A contingent liability can be ignored (not recorded in the financial statements or notes to the financial statements) if it is considered as (probable/reasonably possible/remote) possibility.

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  1. 11 November, 10:22
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    remote

    Explanation:

    There are certain conditions for any transaction to be recorded as in the financial statements that is books of accounts.

    For this, even in the accrual basis there must be a possibility of the occurrence of a certain event which shall create a liability on the company to pay such dues, under conflict.

    Also that shall be probable on an fair basis that the chances of occurrence of such event are fair. In case the chances are remote and that the event is not fairly probable then no liability shall be recorded.
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