Final answer:
No action is taken with contingent assets under IFRS when the likelihood of realisation is remote. Contingent assets are potential assets dependent on future events outside an entity's control and are not recognised in financial statements unless virtually certain.
Step-by-step explanation:
In accordance with the International Financial Reporting Standards (IFRS), no action is taken concerning contingent assets unless their realisation is virtually certain. As such, the correct answer to when we take no action with contingent assets is B. When the likelihood is remote. A contingent asset is a possible asset that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the entity's control.
Recognition of contingent assets is dealt with in IAS 37 — Provisions, Contingent Liabilities, and Contingent Assets. According to IAS 37, entities should not recognize contingent assets even if the inflow of economic benefits is probable. They are only to be disclosed in the financial statements when an inflow of economic benefits is considered virtually certain. Therefore, no entry is made in the financial statements for contingent assets with a remote likelihood, though they may need to be disclosed in the notes to the financial statements if the potential benefit is significant.