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Contingent Assets

A contingent asset may be defined as a possible asset that arises from past events and whose existence will be confirmed only after occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise. It usually arises from unplanned or unexpected events that give rise to the possibility of an inflow of economic benefits to the business entity. For example a claim that an enterprise is pursuing through legal process, where the outcome is uncertain, is a contingent asset.


A contingent asset need not be disclosed in the financial statements. It is not shown in the Notes.

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