Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 2 terms
An obligation that may arise depending on a future event — tax disputes, guarantees, litigation.
Not on the balance sheet. If the total exceeds net worth, a material risk is hiding in a footnote.
A possible asset arising from a past event whose existence depends on an uncertain future event.
The mirror of a contingent liability, and deliberately not symmetrical. A liability is provided for when an outflow is probable; an asset is recognised only when realisation is virtually certain.