A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Such assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. When it become virtually certain that an inflow of economic benefits will arise then the asset and the related income are recognized in the financial statement of the period in which the change has occured.
In the case where goods lost in accident are covered by the insurance policy, then mere claim for compensation from insurance company cannot be recognised as income by the Company nor the same can be disclosed in notes to Ind AS Financial Statements as a contingent asset because the virtual certainity or the probability of the inflow of economic benefit from the insurance company is not fulfilled yet.
Click Here To Read The Full Story
The post Disclosure of Liability and Contingent Assets in the Financial Statements – Ind AS 37 appeared first on Taxmann Blog.
