Answered: contingent liabilities? Which two…

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contingent liabilities? Which two conditions have to be met in der to report a contingent liability on a balance sheet?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 3DQ

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

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1. What are contingent liabilities and could you give some examples
of contingent liabilities? Which two conditions have to be met in
order to report a contingent liability on a balance sheet?

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