contigent liability must be meaureable what were other choices?
more likely then not… both are incorrect?
CFAdreams Wrote: ------------------------------------------------------- > more likely then not… > both are incorrect? chose more likely than not -1… i guess its not the same in IFRS as it is GAAP… stupid me couldnt find answer in cfai texts
it has to be measurable according to IFRS, must be estimable and more likely than not to occur to be recorded in GAAP, missed this one…damn, i promised myself I was gonna stop posting on this site
Contingent liabilities for IFRS are accounted based on future events, for US GAAP they are accounted if measurable. The test was referring to IFRS, therfore “based on future events” was the correct choice. I realized my mistake after the test. -1 for me.
mik82 Wrote: ------------------------------------------------------- > Contingent liabilities for IFRS are accounted > based on future events, for US GAAP they are > accounted if measurable. The test was referring to > IFRS, therfore “based on future events” was the > correct choice. I realized my mistake after the > test. -1 for me. are you sure about this?
Yeah i am pretty sure. It crazy because there is only a small little paragraph on CFA txtbook at the end of first chapter of FSA. Check it out and tell me what u think.
so you are saying more than likely to occur, disclose??
I think it’s a grey area and the recognition is similar but the wording is different. The exam explicitly differenciated btw “contingent on future events” and “measurable”. The first one means if they are likley to happen in the future (IFRS) and the second one means if we can estimate they value now (US GAAP).
Please confirm! I had already chalked this up to a -1 since I marked “more than likely to occur.”
This has been discussed ad nauseum the correct answer was C which was the CL’s fair value has to be reliably measurable.
im way too lazy to read through any accounting literature at this point to find the answer but could’ve sworn estimable disclose(IFRS), GAAP requires both as I said before
@adavydov7. Please read the CFA txt book at the end of intercorporate investments on FSA book. What you are referring is under US GAAP, not IFRS.
Please do a search for this question, you will find a thread that references exaclty this issue in the CFAI texts with volume and page number!
Mik: this is just for you: http://www.analystforum.com/phorums/read.php?12,1009528,1009539#msg-1009539 Curriculum V2 Pg 44 “Under IFRS, the cost of an acquisition is allocated to the fair value of assets, liabilities, and contingent liabilities. Contingent liabilities are recorded at fair value provided their fair values can be measured reliably.”
Ok guys, I dont want to create more confusion then before. I selected C as “measured reliably” for that question but i not 100% sure if correct. What’s the difference btw us gaap and ifrs then?
Read page 44 in Vol. 2 bro to get the difference.
Well, the criteria under US GAAP and IFRS are similar but US GAAP has more specific criteria regarding probable, possible in order to recognize vs disclose contingent liability. The correct answere was the liability should be measured reliably because you will not recognize but disclose liability which could not be reliably measured. Measurement criteria is in definition of asset/liability.
ANSWER: C, stop discussing this please, -1 for me already, i hate IFRS
^Agree