Contingent Liability
/kənˈtɪndʒənt ˌlaɪəˈbɪləti/
Definitions
- (n.) A possible obligation that may arise depending on the outcome of a future event.
The company disclosed its contingent liability related to pending litigation in its financial report.
- (n.) A liability that is dependent on a particular event occurring, which is uncertain at the time of reporting.
Contingent liabilities must be assessed to determine if they should be recognized or merely disclosed.
Forms
- contingent liabilities
Related terms
See also
Commentary
Contingent liabilities often require judgment in financial reporting and legal evaluation, as recognition depends on the likelihood and measurability of the future event.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.