Because you are an accounting student, one of your business major friends asks you to explain to him why the accounting profession records contingent liabilities only when their occurrence is probable but records deferred income tax assets as long as it is more likely than not that a future benefit will be realized from the deferral. He’s confused by the probability terms used to record these items and wonders why the recognition of assets seems less conservative than the recognition of liabilities. How would you answer your friend?