Gain Contingency

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Gain Contingency

A possible future event that will increase revenue or profits. A common example of a gain contingency is a lawsuit that might be successful. For the sake of fiscal conservatism, gain contingencies are not reported as assets or revenue until the suspected events actually occur.

References in periodicals archive ?

With the exception of tax loss carryforwards, gain contingencies are not generally recognized because they could result in recognition of revenue before it is realized.

3) In practice, entities follow a very conservative policy with regard to gain contingencies and generally only recognize tax-related uncertainties with a greater than 50% chance of being realized.

IAS 37 essentially treats gain contingencies the same way that U.

Accounting for contingencies: disclosure of future business risks

Other loss contingencies are either disclosed or ignored; gain contingencies are never considered.

A new day for business combinations: recognizing the whole enterprise

Recoveries represent gain contingencies which under SFAS 5 may not be accrued until realized.