Liabilities are recognized for known claims when sufficient information has been developed to indicate the involvement of a specific insurance policy.
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A. B.A
The statement is referring to the recognition of liabilities for known claims. When a claim is known, it means that the financial institution has received information indicating that it is liable for a certain amount. In such cases, the institution is required to recognize a liability on its financial statements.
The statement also mentions that the recognition of liabilities is dependent on the development of sufficient information indicating the involvement of a specific insurance policy. This means that if the institution has an insurance policy that covers the claim, it can recognize the liability and the insurance coverage simultaneously.
In summary, the statement is true. Liabilities for known claims must be recognized on the financial statements of a financial institution when sufficient information has been developed to indicate the involvement of a specific insurance policy. This is to ensure that the institution's financial statements accurately reflect its financial position, including any known liabilities and potential insurance coverage.