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How do we report "Contingent Liability" in balance sheet ?

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Question added by Deleted user
Date Posted: 2014/09/03
Muhammad Zubair
by Muhammad Zubair , CFO / Chief Accountant , RH Group

It is disclosed only in notes to the accounts

Aziz ur Rehman ur Rehman
by Aziz ur Rehman ur Rehman , Assistant Manager Finance , Central Power Puchasing Agency (CPPA)

Contingent liabilities

Contingent liabilities are possible obligations whose existence will be 

confirmedonlyontheoccurrenceornon-occurrenceofuncertainfuture 

events outside the entity’s control, or present obligations that are not 

recognisedbecause:(a)itisnotprobablethatanoutflowofeconomicbenefits

will be required to settle the obligation; or (b) the amount cannot  

be measured reliably.

Contingent liabilities are not recognised but are disclosed and described in 

thenotestothefinancialstatements,includinganestimateoftheirpotential

financialeffectanduncertaintiesrelatingtotheamountortimingofany

outflow, unless the possibility of settlement is remote.

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