Accounting · Banking Company Accounts
A bank is assessing its Contingent Liabilities (Schedule 12) and Off-Balance Sheet Exposures. Which of the following statements is correct regarding their financial treatment?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Acceptances, Endorsements, and Other Obligations become an actual liability only upon the default of the bank's constituent customer.
- 2Bills Sold to the Bank are classified as capital reserves.
- 3Forward Exchange Contracts outstanding at year-end are disclosed at their total contract value under Schedule 12.✓
- 4The total value of Schedule 12 is completely excluded from risk-weighted asset calculations for CAR.
Correct answer
Forward Exchange Contracts outstanding at year-end are disclosed at their total contract value under Schedule 12.
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