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Contingent Liabilities
Potential liabilities that may arise depending on the outcome of a future event, often reviewed during due diligence to assess risk.
Implications
Potential obligations that may arise depending on the outcome of a future event, often disclosed in financial statements, and relevant for assessing a company�s financial health and risk exposure.
Example
Example: A company lists a contingent liability for a pending lawsuit in its financial statements, noting that if the lawsuit is lost, it could result in significant financial loss.
Related Terms
Different from fixed liabilities, which are certain and quantifiable, contingent liabilities depend on the occurrence of specific future events.
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