A liability for a contingent loss of a known amount will be disclosed in a footnote if the occurrence of the obligation is deemed to be probable.

Question

Quizplus · Accepted Answer

A contingent liability is a potential obligation that may or may not occur in the future. If the occurrence of the obligation is deemed to be probable, then the liability must be disclosed in a footnote to the financial statements.

A Liability for a Contingent Loss of a Known Amount