Скачать или смотреть Contingent Liability Explained with Example | Accounts | Accountancy

In accounting, a contingent liability refers to a potential liability that may arise in the future, depending on the outcome of uncertain events. It is a possible obligation that arises from past events but is not yet confirmed. Contingent liabilities are disclosed in the financial statements of a company as they have the potential to impact its financial position and performance.

Examples of Contingent Liabilities: Common examples of contingent liabilities include pending lawsuits or claims against a company, potential tax assessments from tax authorities, warranties provided by the company for its products, and guarantees given to third parties. These obligations are contingent because their occurrence and amount are uncertain.

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