Overview

The topic of reporting contingent liabilities is often debated. The reporting of contingent liabilities is based on future events so it is important to understand the concepts behind the reporting requirements.

Outcome

• Analyze, calculate and record entries for current liabilities.

Instructions

1. Research the topic of contingent liabilities and identify a specific real or theoretical contingent liability.
2. Compose a recommendation that covers the following:

• Describes the contingent liability you have selected.
• Recommends whether this contingent liability should be reported and why or why not. (Be sure to include GAAP support for your conclusion!)
• If you recommend reporting of this contingent liability, justify how it would be reported