Examples of contingent liabilities include:
A) Future payments arising under employee entitlements for long service leave.
B) Past tax deductions claimed that are under review by the Australian Taxation Office, but which the entity intends to dispute if disallowed.
C) Out of court settlements in the case of liability for damage to health due to products manufactured by the entity.
D) Past tax deductions claimed that are under review by the Australian Taxation Office, but which the entity intends to dispute if disallowed and out of court settlements in the case of liability for damage to health due to products manufactured by the entity
E) All of the given answers.

Question

Quizplus · Accepted Answer

Contingent liabilities are potential liabilities that may occur depending on the outcome of a future event. Option B is an example of a contingent liability because it involves a potential obligation that depends on the outcome of a tax review.

Examples of Contingent Liabilities Include