contigent liability is expected future liabilty depend on an uncertain future event...it will be provided when it is certain or probable ...jst disclose when it is remote...estimted liability is certain and u r ve estimated it...
by
waseem qaiser , Branch Manager lahore , Standard Chartered Bank
Contingent liability is the one that can become a liability on some future non performance on part of the parties involved like usance l/c not paid on time by the applicant or in case of a sight l/c documents not retired by the applicant while estimated liability is the one which is already accounted for in the books like wages. Bills etc
Contingent liability is a liability which will depend on the outcome of the future event such a legal case against the company in the court of law.
These are recorded in the financial statements by taking probable worst case financial outcome.
Estimated liability is a liability which is estimated for example the electricity bills or workers overtime etc.
