Question: Method two: Do not include contingent assets and contingent liabilities in the financial statements. However, disclose details of the contingent assets and contingent liabilities in

Method two: Do not include contingent assets and contingent liabilities in the financial statements. However, disclose details of the contingent assets and contingent liabilities in the notes to the financial statements.

a)If a company were to adopt method two, why would they prefer not to disclose contingent assets and liabilities in the financial statements? Provide at least two reasons to support your answer (3 marks).

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