SALE ENDS AT MIDNIGHT: Get started with $1000 off!

Contingent Liability

Contingent Liability

A contingent liability is a debt you might have but you don’t know for sure.

If someone sued you, you’ll have a debt if you lose. But you won’t know for sure until the case ends. You might have a liability. That is a contingent liability. If you guaranteed a loan for your son, you might have to pay if he doesn’t. But you won’t know until you find out if he paid. That is a contingent liability. If it’s looking like you will have to pay a contingent liability and you know how much it is, companies put it on their balance sheet. Otherwise they list it in the notes to the financial statements.

There is currently no content classified with this term.

Get instant access to step-by-step instructions on how to apply and sit for the CPA Exam.