The correct answers are:

• A company should disclose details of the change in carrying value of a provision from the beginning to the end of the year.

• Contingent liabilities must be treated as actual liabilities and provided for if it is probable that they will arise.

Contingent assets should not be recognised in the financial statements. However, they should be disclosed if it is probable that the economic benefits associated with the asset will flow to the entity. If it becomes probable that the a transfer of economic benefits associated with a contingent liability will happen, then the contingent liability is no longer contingent and a liability should be recognised in the financial statements.