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Where are the contingent liabilities disclosed in the financial reports?

Where are the contingent liabilities disclosed in the financial reports?

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Answer #1

ANSWER :-

Contingent Liability means :- It means a obligation which is arise on happening or not happening of an future event.

- If it is possible to estimate the value of contingent Liability:-

-Then there are two ways to disclosures of contingent Liability in financial statement are:-

1). The chance of being realised of liability is more than 50% :-

  • Then the contingent Liability recorded as an expense on the income statement and liability in balance sheet.

​​​​​2). The chance of being realised of liability is less than 50% :-

  • Then the contingent Liability disclosure in footnote note of the financial statement.

- If it is not possible to estimate the value of contingent Liability -

​​​​​​​Then the contingent Liability disclosure in the footnote of the financial statement.

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