Recognition and Derecognition (B6.5)

Recognition and derecognition based on Conceptual Framework:

1. Recognition Criteria: Assets and liabilities should be recognized if they provide relevant and faithfully represented information that benefits exceed the costs.
2. No Single Probability Threshold: The Conceptual Framework doesn't mandate a specific probability threshold (like "probable") for recognition.
3. Low Probability Items: Even with low probability, assets/liabilities can exist. However, the most relevant information may be about the potential magnitude, timing, and influencing factors.
4. Disclosure: Items with low probability are likely to be disclosed in the notes to the financial statements.
5. Derecognition Criteria: Derecognition should faithfully represent the retained assets/liabilities and the overall change in the entity's financial position resulting from the transaction.