Obligations for which the amount of the future sacrifice is so uncertain that it cannot be measured reliably are classified as: Select the one correct answer:

Q: What are Contingent Liabilities?  Give an example.  What are the factors that determine the reason…

A: A liability, the occurrence of which is uncertain that is it may or may not occur is known as a…

Q: Describe the approaches for measurement of fair value.

A: When measuring fair value of fixed assets, intangible assets, specified financial assets or…

Q: What is the difference between an unconditional and conditional pledge ?  How are the two pledges…

A: the pledge refers to something that held as a  security on the contract, which can be a  promise, or…

Q: The process of determining which risks to insure and which applicants to reject is known as

A: Given information The process of determining which risks to insure and which applicants to reject…

Q: What factors should be considered in determining the issue price of a debenture ?

A: Debentures are the long term debt issued to pursue a new project. Interest paid in debentures are…

Q: look over the three most important components of the pension expense. The treatment of expected and…

A: Introduction  Companies account pension expense on accrual basis, accounting for pension plan…

Q: Off-balance sheet financing means that a company has larger obligations than it shows on its balance…

A: The main objective of off-balance sheet financing is to show the debt liabilities of the company at…

Q: Why would an insured inflate claims and who are the ones to suffer for it?

A: Insurance can be defined as the contract that is signed by an insurer indemnifies another person…

Q: Define and discuss survivorship bias and selection bias, and how they affect reported returns of…

A: Survivorship bias is a type of bias in which a person has a tendency to view the performance of…

Q: Give some examples of an insurable interest and explain why they are insurable.

A: Introduction: Insurable interest is nothing but an interest in the subject of an insurance policy…

Q: How is the Handling of Unequal Service Lives done?

A: When decision has to be made while comparing one project with other projects and out of which only…

Q: Define the term Equivalent worth-calculation?

A: To define the term Equivalence worth calculation.

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.