Contingent Asset

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Contingent Asset

An asset that a company may have or receive but only if a certain future event occurs. Usually, a contingent asset refers to the outcome of a lawsuit: that is, the company may be awarded a significant amount of money if it wins the lawsuit. Contingent assets are not ordinarily recorded on a balance sheet because of the uncertainty surrounding them. Their existence may or may not affect the company's share price. See also: Contingent Liability.
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In accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets, a provision should be recognized when a legal or constructive obligation exists and such an obligation can be reliably estimated.
Former members of Chartis Risk Solutions have launched Miravast, a risk management firm specializing in life contingent assets, including life settlements.
Similar to the stipulations in ASC 450, unless realization of income is "virtually certain," IAS 37 does not permit the recognition of contingent assets.
The takeover comes along with an announcement that Hephaestus is going to demerge its newly formed investment company holding cash for investment leaving its legacy contingent assets and liabilities behind in the company.
Blue-chip firms have hired consultants and are mooting deals with trustees of pension funds to use so-called contingent assets, most commonly real estate, but also intellectual property
Corporate pension schemes known to have hefty pension deficits but which have not yet used contingent assets include telecoms operator BT and the Royal Mail, which have deficits of around 7.
The Family Law Financial Affidavit form approved by the Florida Supreme Court likewise states that contingent assets and liabilities must be listed as follows: "If you have any possible assets (income potential, accrued vacation or sick leave, bonus, inheritance, etc.
The accounting guidance for contingent assets and liabilities arising from business combinations described above reflects revisions to guidance initially promulgated by the FASB.
Analysts believe BA could insure all or part of its liabilities through a buy-out deal with a specialised insurer or hedge specific risks such as the longevity of pensioners through a swap deal or pledge contingent assets such as its real estate.
Tsakumis (lead author of this article) found that when presented with similar economic facts and financial reporting guidelines, accountants in the United States and Greece made different contingency recognition and disclosure decisions in their application of IAS 37, Provisions, Contingent Liabilities and Contingent Assets.
Contingent assets - This term describes a number of different arrangements which can be put into place in respect of a scheme to provide additional comfort for the trustees against the risk of the sponsoring employer's insolvency.
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