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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CPC 00--Basic Conceptual Pronouncement, CPC 01 Impairment of assets, CPC 03--Statement of cash flow, CPC 05--Related party disclosures, CPC 10--Share based payment, CPC 23--Accounting Policies, Change in Accounting Estimates and Correction of Errors, CPC 24 Subsequent events and CPC 25--Provisions, contingent assets and liabilities.
Insurance contracts have been intentionally excluded from other IFRS standards such as IFRS 15 (Revenue from Contracts with Customers), IAS 37 (Provisions, Contingent Liabilities and Contingent Assets) and IFRS 9 (Financial Instruments).
The increase year-over-year related to amortization of intangible assets and a one-time fair market value adjustment of $177 thousand to contingent assets, a $200 thousand reserve established for the open litigation as well as higher levels of other employee-related expenses, shares tax expense, and other expense.
Valuations involving contingent assets and liabilities and disputed claims at the time of a transfer also warrant special consideration.
The concern is that life insurers who use contingent assets such as letters of credit to back the excess portion of reserves provide less protection for policyholders, the letter said.
In a section of the accounts, for the year ended December 2015, detailing the firm's contingent assets and liabilities, the company says: "In December 2015 the Miller Group was successful in a legal action brought against one of its former customers.
By not instantly recognizing these contingent assets or liabilities, the purchase method ignores these potential cash flows which causes statements not to be adequately informative.
International Accounting Standard (IAS) 37, Provisions, Contingent Liabilities and Contingent Assets, from the International Accounting Standards Board (IASB) is the principal international counterpart to ASC 450.
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.
In fact, under IFRS 3 the criterion of "measured reliably" may result in more contingent liabilities being recorded during a business combination than would otherwise be recorded by companies following IAS 37, "Provisions, Contingent Liabilities and Contingent Assets."
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