What is the meaning of contingent liability?

Ans. 'Contingent Liability' is:

(a) A possible obligation/liability that arises from past events. Its existence is confirmed only by the occurrence or non-occurrence of one or more uncertain future events which a person cannot control wholly.

(b) A present obligation that arises from past events but is not recognised because:

• It is not reasonably certain that an outflow of resources embodying economic benefits will be required to settle the obligation; or
• A reliable estimate of the amount of the obligation cannot be made.​