Question: Exercise 1.4 ASSESSING PROBABILITIES IN ACCOUNTING RECOGNITION The Conceptual Framework defi nes an asset as a resource from which future economic benefi ts are

Exercise 1.4 ★ ASSESSING PROBABILITIES IN ACCOUNTING RECOGNITION The Conceptual Framework defi nes an asset as a resource from which future economic benefi ts are expected to fl ow. ‘Expected’ means it is not certain, and involves some degree of probability. At the same time the Conceptual Framework establishes, as a criterion for recognising an asset, that ‘it is probable that any future economic benefi t associated with the item will fl ow to or from the entity.’ Again, an assessment of probability is required. Is there a redundancy, or possibly some type of inconsistency, in including the notion of probability in both the asset defi nition and recognition criteria?

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