- Contingency is a situation, the ultimate outcome of which is, either gain or loss, will be known or determined only on happening or non-happening of one or more uncertain future events.
- Contingent assets is a possible economic benefit which may arise from past events.
- Contingent liability is a possible obligation which arises from past events. Contingent liability has no impact on profits for the period.
- Contingent asset and Contingent liabilities should be disclosed as a foot note in the financial statement.
- Provision is a present liability of a certain/uncertain amount.
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- This is a timed test.
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