The word "probable" appears in the definitions of assets and liabilities and in the recognition criteria for liabilities with uncertain amount and/or timing
a. What is the meaning of probable as used in the definitions of assets and liabilities?
b. How does the meaning of probable as used in the recognition criteria for liabilities with
uncertain amount and/or timing differ between U.S. GAAP and IFRS?
a. In the definitions of assets and liabilities, probable is used to capture the idea that in commercial operations nothing can be entirely certain. It is used in its ordinary sense to refer to that which can be reasonably expected.
b. In the recognition criteria for liabilities with uncertain amount and/or timing, probable is used in U.S. GAAP to refer to a relatively high threshold of likelihood—a rule of thumb used in practice is approximately 80%. In IFRS, probable as recognition criterion for liabilities with uncertain amount and/or timing means "more likely than not"—approximately 51%.
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Fill in the blank(s) with the appropriate word(s).
________ refer(s) to the federal statute enacted by Congress, or the state statute enacted by a state legislature, that is enforced by the administrative agency.
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