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A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise.
An example of a contingent asset is a legal claim being made by an enterprise. If the claim is successful, then the enterprise will receive compensation. But the outcome is uncertain and not within the control of the enterprise.
A contingent asset should not be recognised, but it should be disclosed if the future benefits is probable. If the future benefits is virtually certain, then it ceases to be a congtingent asset. It will be recognised as a normal asset.
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