Explain, measure, and report contingent liabilities.

- A contingent liability is an obligation whose amount or timing depends on future events.

- A contingent liability is not recognized in the accounts unless the event on which it is contingent is probable (more likely than not to occur) and a reasonable estimate of the liability can be made.

- If occurrence of the contingent event is not probable or reliable measurement of the obligation is impossible, the potential obligation is not recorded as a liability, but must be disclosed in the footnotes.

- If occurrence of the contingent event is remote, the potential obligation is not recorded or disclosed.