Contingent Liabolity
Querist : Anonymous
Querist : Anonymous
There is some doubt in my mind. Bank guarantee is given by bank on companies behaif. In such case it is contingent liability for Bank. if company concerned fails to full fill condition for which BG is given bank have to pay as per BG given. so it is quite clear it is Contingent liablity for bank
As far as company is concerned i am of openinon that it can not be termed as contingent liability. as result of out come of liality to pay for BG is on performance of its own duty.
kindly clarify.
You have not mentioned anywhere in your query who has given the bank guarantee for whom. So the answer is a subjective to the problem in hand. I thought that it could have a bank guarantee given for a group company also like a counter guarantee and hence was to be shown as contingent liability.
If someone else has given a guaranttee for you then it is not a contingent liability for the purpose of your accounts.
Querist : Anonymous
i do accept my question was not clear.
Thank u for solving Query
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