BUS 426 Chapter Notes - Chapter 21: Contingent Liability, Financial Statement, Costs In English Law
Document Summary
Contingent liability: a liability that arises due to an existing condition or situation involving uncertainty as to possible gains or losses: conditions for the existence of contingent liabilities: There is a potential future payment to an outside party that results from an existing condition. There is uncertainty about the amount of the future payment. Likely to occur and the amount can be estimated. Likely to occur and the amount cannot be estimated. Common procedures to search for contingent liabilities: inquire of management, review current and previous years" cra notices of assessment, review minutes and shareholders" meetings, analyze legal expense for the period under audit. If law firms don"t respond, its usually either: Lawyer aware of a significant loss and don"t want: two types of law suits: to disclose it. Outstanding claim: a lawsuit that has been brought against a client; also known as an asserted claim .