Answer:
In accounting, contingent liabilities are liabilities that may be incurred by an entity depending on the outcome of an uncertain future event such as the outcome of a pending lawsuit.
Step-by-step explanation:
These liabilities are not recorded in a company's accounts and shown in a type of balance sheet when both probable and reasonably estimable as 'contingency' or 'worst case' financial outcome. The likelihood of loss is described as probable, reasonably possible, or remote. The ability to estimate a loss is described as known, reasonably estimable, or not reasonably estimable. It may or may not occur.
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