The Public Sector Accounting Forum noted there are instances where it may be unclear whether an entity should recognise an asset (receivable), or disclose a contingent asset. For example, equitable share withheld or overpayment to staff who have left.

Based on an asset’s definition and recognition criteria, an entity assesses the probability of future economic benefits or service potential to the entity. The assessment may be impacted by the type of proceedings, e.g. through the legal system or proceedings per an entity’s management policies.