Which of the following is not a contingent government liability
A) Future pension payments promised to the current workforce
B) The future decommissioning cost of state owned nuclear power plants
C) Health care spending promised to an aging population
D) Government debt that has to be paid off in future
E) The economic costs of climate change that will be faced by the government

Question

Quizplus · Accepted Answer

Government debt that has to be paid off in the future is not a contingent liability, but a current liability. Contingent liabilities are potential future costs that may or may not be incurred, depending on certain events or circumstances. The other options are all examples of contingent liabilities, as they represent future costs that become due if certain events occur (e.g. employees retiring, nuclear plants needing to be decommissioned, healthcare needs increasing, climate change impacts intensifying).

Which of the Following Is Not a Contingent Government Liability