It is either a possible obligation arising from past events and depending on future events not under an entity's control, or a present obligation not recognized because either the entity cannot measure the obligation or settlement is not probable.
Contingent Liability. Definition: A contingent liability is either a possible obligation arising from past events and depending on future events not under an entity's control, or a present obligation not recognized because either the entity cannot measure the obligation or settlement is not probable.  contingent liability. An obligation that may result, but is not likely to result because the event causing the obligation is improbable. For example, the award from a lawsuit against a firm is a contingent liability of the defendant if there is little likelihood the plaintiff will recover the award. Contingent Liability. A liability that a company may have to pay, but only if a certain future event occurs. Usually, a contingent liability refers to the outcome of a lawsuit: that is, the company may have to pay a significant amount of money if it loses the lawsuit. Nature of contingent liabilities in accounting. A contingent liability is an amount that may be due depending on future events. Because it cannot be determined whether the amount must be paid until events unfold, the company's likelihood of loss is scored as one of the following: 1  Probable. 2  The future event or events are likely to occur. 1. A contingent liability is an amount that may be due depending on future events. Because it cannot be determined whether the amount must be paid until events unfold, the company's likelihood of loss is scored as one of the following: 1  Probable. 2  The future event or events are likely to occur. contingent liability. A liability that is not currently a liability but may become one upon the happening of some future event.If a father guarantees the student housing lease of his son,then the son is liable for the rent but the father may become liable if the son defaults. contingent liability. An obligation that may result, but is not likely to result because the event causing the obligation is improbable. A contingent liability is a liability that may or may not exist depending on what happens in the future. Accountants and auditors are sometimes required to determine whether or not a company is exposed to contingent liabilities and to estimate potential losses if the contingent liabilities becomes reality. Many different circumstances can create contingent liabilities. For example, a guarantee creates a contingent liability because some customers may complain that the product didn't perform as guaranteed. A lawsuit creates a contingent liability because the company may have to pay a judgment if it loses the lawsuit. IAS 37 Provisions, Contingent Liabilities and Contingent Assets outlines the accounting for provisions (liabilities of uncertain timing or amount), together with contingent assets (possible assets) and contingent liabilities (possible obligations and present obligations that are not probable or not reliably measurable).  Contingent Liability. A liability that a company may have to pay, but only if a certain future event occurs. Usually, a contingent liability refers to the outcome of a lawsuit: that is, the company may have to pay a significant amount of money if it loses the lawsuit. contingent liability. An obligation that may result, but is not likely to result because the event causing the obligation is improbable. A contingent liability is an amount that might have to be paid in the future, but there are still unresolved matters that make it only a possibility. Lawsuits and the threat of lawsuits are the ... A contingent liability is recorded in the books of accounts only if the contingency is probable and the amount of the liability can be estimated.
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what is a contingent liabilities