One of examples of contingent liability is an: * a. Obligations related to product warranties b. Possible receipt from a litigation settlement c. Pending court case with a probable favorable outcome d. Tax loss carryforwards

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.