Contingent liability

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Contingent 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.

[edit] Examples

• outstanding lawsuits
• Accounts payable
• Liability
• Liquidated damages
• Tort
• Bills Discounted with bank
• Unliquidated damages