Question: Question 2 (a) Explain the differences between provision and contingent liability in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets and why they

Question 2 (a) Explain the differences between provision and contingent liability

Question 2 (a) Explain the differences between provision and contingent liability in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets and why they are accounted for differently. [6 marks] (b) An employee of Economic Berhad was injured while carrying official duties. He has filed a claim for damages from the company for RM400,000. There is no insurance coverage provided for the employees and the legal opinion is that the company may have a 60% probability to be held liable. Discuss whether a provision should be created. [4 marks]

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