What is the accounting term for a liability that may arise if a future event does not happen?
Contingent liability reasonably estimable. It may or may not occur. Contingent liability 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. These liabilities are not recorded in a company's accounts and shown in the balance sheet when both probable and reasonably estimable as 'contingency' or 'worst case' financial outcome. A footnote to the balance sheet may describe the nature and extent of the contingent liabilities. The likelihood of loss is described as probable, reasonably possible, or remote. The ability to estimate a loss
Liability (financial accounting) Liability (financial accounting) In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is "obliged" to make to other entities as a result of past transactions or other "past" events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future. A liability is defined by the following characteristics: Liabilities in financial accounting need not be legally enforceable; but can be based on equitable obligations or constructive obligations. An equitable obligation is a duty based on ethical or moral