Contingent_liabilities

Contingent liabilities are liabilities that may or may not be incurred by an entity depending on the outcome of a future event such as a court case. These liabilities are recorded in a company\'s accounts and shown in the balance sheet when both probable and reasonably estimable. A footnote to the balance sheet describes the nature and extent of the contingent liabilities. The likelihood of loss is described as probable, reasonably possible, or remote. The ability to estimate a loss is described as known, reasonably estimable, or not reasonably estimable.

Examples

• environmental cleanup
• bills discounted
• forward contracts
• litigation claims
• acquisition cost in a merger, with regards to a calculated goodwill.
• contingent asset retirement obligations

See also

• Accounts payable
• Liability
• Liquidated damages
• Tort
• Unliquidated damages

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