There are 3 contingent liability categories specified in generally acceptable accounting principles (GAAP): probable, possible, and remote. In general, probable contingencies are more likely to occur and can be reasonably appraised. Possible contingencies are less likely to occur but could still occur. Remote contingencies are not likely to occur.

Based on research, consider any one real world example of contingent liability.

Discuss the situation that would have led to the contingent liability.

Discuss the category this liability belongs to.

Discuss the circumstances under which it should be accrued and/or disclosed.