Answer:
This is because remote contingencies are considered to have a low likelihood of occurring, so they are not deemed significant enough to impact the financial statements or require additional disclosure.
If a potential loss on a contingent liability is remote, the liability is usually disclosed in footnotes, but not accrued. This means that the potential loss is mentioned in the additional information section of the financial statements, but no amount has been set aside in anticipation of the loss. It is important to note that if the likelihood of the loss increases, the company may need to reevaluate and potentially accrue the liability in their financial statements.
Step-by-step explanation:
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