probable

(adjective)

Likely or most likely to be true.

Related Terms

Examples of probable in the following topics:

  • Reporting Contingencies

    • Contingencies are reported as liabilities if it is probable they will incur a loss, and their amounts can be reasonably estimated.
    • Contingencies are reported as liabilities on the balance sheet and/or disclosed in the notes to the financial statements when it is probable they will incur a loss and when the loss can be reasonably estimated.
    • Probable is defined as more than 50% likely to occur due to a past obligation.
    • A probable loss contingency can be measured reliably if it can be estimated based on historical information.

  • Gain Contingencies

    • If the gain is probable and quantifiable, the gain is not accrued for financial reporting purposes, but it can be disclosed in the notes to financial statements.
    • If the gain is not probable or its amount cannot be reasonably estimated, but its effect could materially affect financial statements, a note disclosing the nature of the gain is also disclosed in the notes.
    • A material gain contingency that is both probable and reasonably estimated can be disclosed in the notes to financial statements.

  • Loss Contingencies

    • Due to conservative accounting principles, loss contingencies are reported on the balance sheet and footnotes on the financial statements, if they are probable and their quantity can be reasonably estimated.
    • The likelihood of the loss is described as probable, reasonably possible, or remote.
    • Unlike gain contingencies, losses are reported immediately as long as they are probable and reasonably estimated.

  • Bond Valuation Method

    • If the market rate is greater than the coupon rate, the bonds will probably be sold for an amount less than the bonds' face value and the business will have to report a "bond discount. " The value of the bond discount will be the difference between what the bonds' face value and what the business received when it sold the bonds.
    • If the market rate is less than the coupon rate, the bonds will probably be sold for an amount greater than the bonds' value.

  • Classifying Liabilities

    • The only conditions under which the debt would not be classified as current would be if it's probable that the violation will be collected or waived.
    • Contingent items are accrued if the claims and their likelihood of occurring are probable, and if the relevant amount of the liability can be reasonably estimated.

  • Being Aware of Off-Balance-Sheet Financing

    • Furthermore, uncertain assets or liabilities are subject to being classified as "probable", "measurable" and "meaningful".

  • Defining Long-Lived Assets

    • Assets represent probable present benefit, involving a capacity, solely, or in combination with other assets, to contribute directly or indirectly to future net cash flows, and, in the case of not-for-profit organizations, to provide services;

  • Defining Liabilities

    • Probably the most accepted accounting definition of a liability is the one used by the International Accounting Standards Board (IASB).

  • Recognition of Revenue After Delivery

    • The cost recovery method is used when there is an extremely high probability of uncollectable payments.

  • Characteristics of Bonds

    • The "quality" of the issue refers to the probability that the bondholders will receive the amounts promised on the due dates.