A company has booked a total of 300 crore as provision in liabilty side in the balance sheet cumulatively till the end of financial year based on past events. But on the same amount now there is court case and the amount to be paid is not yet decided. Should the company remove 300 crore from provision and disclose in the contingent liabilty.
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Transfering the provision provided in the balance sheet to contingent liabilty
Replies (1)
Discuss with your auditor and find out if the outcome is possible, probable or remote. Based and n this criteria, you can leave it as a provision or make it a contingent liability or do nothing.
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