ASC 450-20: Explanation of Legal Claim Contingent Liability & Journal Entries
A contingency occurs when a current situationhas an outcome that is unknown or uncertain and will not beresolved until a future point in time. A contingent liability canproduce a future debt or negative obligation for the company. Someexamples of contingent liabilities include pending litigation(legal action), warranties, customer insurance claims, andbankruptcy. Companies make contingent liability journal …
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