Brittany plc is currently being prosecuted by the UK government for tax avoidance. If the company is found guilty, it is expected that a total of £3 million in fines and unpaid taxes will have to be paid. Lawyers acting on behalf of the company believe that it is probable that the company will lose the case.

Normandy plc operates an oil depot. A recent fire devastated the depot and led to a number of serious injuries. The company has admitted negligence and has agreed to pay £5 million in fines and compensation.

Provisions, contingent liabilities and contingent assets, which of the above should lead to the reporting of a contingent liability?

Answer rating: 100% (QA)

Both situations should lead to the reporting of a contingent liability In the case ... View the full answer