A contingency is a potential event or circumstance that is uncertain but could have either positive or negative consequences on an entity's financial situation or operations. It is often considered in risk management and financial planning.
A possible asset that arises from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events, beyond the control of the accounting entity.
Either a possible obligation arising from past events that will be confirmed by one or more uncertain future events not wholly within an entity's control, or a present obligation from past events that cannot be measured reliably or is not probable to require settlement.
A contingent liability refers to potential financial obligations that a business may incur due to actions of parties other than its own employees, notably when independent contractors are involved.
A contingent loss is an economic loss that may occur in the future depending on the outcome of a specific event, typically related to a contingent liability.
A liability is an obligation that a company needs to settle in the future, generally in the form of economic benefits such as money. Liabilities often result from past transactions and play a crucial role in a company's financial health by representing what it owes.
In the USA and Canada, stock (shares) that have no par value or assigned value printed on the stock certificate, thus avoiding contingent liabilities and simplifying accounting entries.
