Is litigation claim classified under provisions or contingent liabilities?

Question

Question

Answer 1

Answer #1

Litigation claim is classified under contingent liabilities. It is an uncertain event. It may or may not happen in the future.

Source :https://www.toppr.com/.../contingent-assets-and-liabilities/contingent-liability

Answer 2

Similar Homework Help Questions

If there’s a specific amount for litigation claim, will it be classified as provisions or contingent...

If there’s a specific amount for litigation claim, will it be classified as provisions or contingent liabilities?
Does litigation claim fall under non-current liabilities in the balance sheet?

Does litigation claim fall under non-current liabilities in the balance sheet?
Analyze the key concepts about Provisions, Contingent Liabilities and Contingent Assets in accordance to IAS 37....

Analyze the key concepts about Provisions, Contingent Liabilities and Contingent Assets in accordance to IAS 37. Clearly stating whether it should be recognized in financial statement or disclosure as notes to accounts. Enhance your answer by giving appropriate examples.

argument, 20 marks) Question Two: Provisions are particular kinds of liabilities. It therefore follows that provisions...

argument, 20 marks) Question Two: Provisions are particular kinds of liabilities. It therefore follows that provisions should be recognized when the definition of a liability has been met. The key requirement of a liability is A present obligation and thus this requirement is critical also in the context of the recognition of a provision. IAS 37 Provisions, Contingent liabilities and Contingent Assets deals with this area. 1) Explain the definition of provisions and why there was a need for detailed...
Provisions are contingent liabilities which are accrued because the likelihood of an unfavorable outcome is a....

Provisions are contingent liabilities which are accrued because the likelihood of an unfavorable outcome is a. virtually certain. b. greater than 50% . c. at least 75%. d. possible
Compare and contrast the requirements of IFRS 3 and IAS 37 in respect of restructuring provisions and contingent liabilities.

Compare and contrast the requirements of IFRS 3 and IAS 37 in respect of restructuring provisions and contingent liabilities.

Product warranties are classified as Select one: a. estimated liabilities b. contingent liabilities c. knowable liabilities...

Product warranties are classified as Select one: a. estimated liabilities b. contingent liabilities c. knowable liabilities d. unknowable liabilities
what are contingent liabilities? list three examples of contingent liabilities. When should contingent liabilities be recorded...

what are contingent liabilities? list three examples of contingent liabilities. When should contingent liabilities be recorded in accounts?
GK, Inc. has the following outstanding litigation claims against it: 1. A claim of $100,000. GK...

GK, Inc. has the following outstanding litigation claims against it: 1. A claim of $100,000. GK thinks it is probable it will lose the claim, and estimates the loss at $75,000 if it occurs. 2. A claim of $50,000. GK thinks it is probable it will lose the claim, but cannot estimate the amount of loss. 3. A claim of $10,000. GK thinks it is reasonably possible it will lose the claim, and estimates the loss at $8,000 if it...

The commingling of legal and contingent liabilities exists under current GAAP accounting. Discuss potential problems this...

The commingling of legal and contingent liabilities exists under current GAAP accounting. Discuss potential problems this creates and propose alternatives to address them.