Contingent Liabilities

These are sub set of liabilities ' liability of uncertain timing or amount'

The key distinguishing factor is the uncertainty relating to either the timing of settlement or the amount to be settled (provision)

Warranty Restructuring Provisions for onerous contracts. - unsure about timing and amount of them, but it is probable for them to occur.

Provisions can be distinguished from other liabilities such as trade payables and accruals because there is uncertainty about the timing or amount of the future expenditure required in settlement. Trade payable and accuruals- the uncertainty is much less than provisions

Lawsuit- we don't know the occurence of it- could win or could loose. The uncertainty of this is key to know that it is a contingency

Contingent liabilities do not meet the recognition criteria stated in the conceptual framework and therefore are not recognised in the financial statements. It must be disclosed in the notes to the financial statements unless the possibility of an outflow in settlement is remote.

same as liabilities

Contingent liability - Amount can be estimated but very low probability Provision - Probable occurrence but we are unsure about the amount and timing- Recognise