Contingent Assets are possible assets arising from existing conditions or situations involving uncertainty. That uncertainty will ultimately be resolved when one or more future events not wholly within the public sector entity's control occurs or fails to occur. Resolution of the uncertainty will confirm the existence or non-existence of an asset.
Contingent assets are distinct from assets since there is a degree of uncertainty as to whether an asset exists at the financial statement date.
Contingent assets have two basic characteristics:
An existing condition or situation that is unresolved at the financial statement date; and
An expected future event that will resolve the uncertainty as to whether an asset exists. This event cannot be wholly within the control of the public sector entity.