{"id":2586,"date":"2021-05-10T20:46:46","date_gmt":"2021-05-10T20:46:46","guid":{"rendered":"https:\/\/enorcerna.com\/wiki\/definition\/contingent-asset\/"},"modified":"2021-05-10T20:46:46","modified_gmt":"2021-05-10T20:46:46","slug":"contingent-asset","status":"publish","type":"post","link":"https:\/\/enorcerna.com\/wiki\/definition\/contingent-asset\/","title":{"rendered":"Contingent asset"},"content":{"rendered":"
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\nA contingent asset is an expectation of future income that does not depend directly on a company. Its compliance or not will depend on third parties, so it is within uncertainty.<\/strong><\/span><\/p>\n

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When speaking of contingent assets in economic matters, it refers to the expectation about events that are possible to happen. That is, they are framed within uncertainty.<\/p>\n

That is, there are assets that have not yet succeeded or materialized, but that a company has and integrates into its financial statements.<\/p>\n

The existence of this type of asset is usually related to events or events in the past. Therefore, we speak of stable expectations for a period of time until the occurrence, or not, of the expected event.<\/p>\n

In this sense, these economic situations are linked to areas such as insurance brokerage or the field of compensation for multiple factors.<\/p>\n

Likewise, claims to third parties that are finely compensated and benefit the company are identified as contingent assets.<\/p>\n

Accounting for a contingent asset<\/h2>\n

Formally, the accounting does not conceive that contingent assets are included in the accounting books. The sense of this is that it would give a not very faithful image of the company, since the expectation of future income could not be fulfilled.<\/p>\n

It would be at the time of fulfillment of the contingency fact, when it would be correct to make the entry as it is finally considered as a real event. In other words, it is a confirmed and verifiable gain. <\/p>\n

Said note will consider the entry of compensation as income and will become part of the asset in the company's balance sheet in said period.<\/p>\n

Any time prior to said confirmation may be included in the accounting information as an indication or annotation, without affecting the statements numerically or accounting.<\/p>\n

Contingent asset example<\/h2>\n

There are a lot of examples in day-to-day economics regarding contingent assets. The most recurrent are identified with prospects of collections of a certain amount of money subject to a judicial decision.<\/p>\n

Proof of this are the compensation received when winning a lawsuit or in the collection of insurance for various contingencies.<\/p>\n

Interestingly, for the other party, this fact would alternatively be considered as a contingent liability.<\/p>\n<\/div>\n\n\n

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A contingent asset is an expectation of future income that does not…<\/p>\n","protected":false},"author":1,"featured_media":2587,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2586","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-definition"],"_links":{"self":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/2586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/comments?post=2586"}],"version-history":[{"count":0,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/posts\/2586\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media\/2587"}],"wp:attachment":[{"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/media?parent=2586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/categories?post=2586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enorcerna.com\/wiki\/wp-json\/wp\/v2\/tags?post=2586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}