contingent liability

hi

whats the accounting treatment for contingent liability on bills receivable discounted?

what does it mean?

is contingent liability is accounted as liabilty and disclosed in Balance sheet as foot note?

Replies (6)

HI Dear,

Contingent liability is not a real liability. Thats why it is not shown in balance sheet. It is just disclosed as contingent liability as a Notes on Accounts.

CA. Vijay Sharma

 

hi,

Contingent Liabilities is nothing but not a actual liability of company on B/S date, it may or may not arise in future, because of this we have to disclose under B/S as Footnote as per company law.

 

hi thanks.. how is it treated on it becoming an actual liability say in case of bills receivable discounted?

is it to be adjusted against Debtors  or bills receivable?

What are the flow of entries for this?

Hi,

When you have already Discounted the bill How can the actual liability affect the B/R acc?? cuz you already cancelled it while discounting. When actuall default occurs the bank will automatically debit your account. So your 

contingent Liability will be lifted and your Debtors(increase)  and Bank balance (decrease) will be affected.

Hi All,

Contingent Liability is a potential liability to the company. It becomes actual liability only in case if  it happens. Thats why it shown in Balance sheet. as Foot note.

For Example:- Company sells its product to the customer saying that it will replace the product if it becomes defective. If no product have become defective then its not actual liability to the company. Thats why contingent liability is shown in Balance as Foot note.

 

 

Sir

 

Can the pre-construction period interest in housing loan be claimed fully in the previos year of acquisition of property subject to the limit of Rs.150000/- for self-occupied and unlimited for let-out property

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
12 October 2026
Chartered Accountant - Internal Audit

HKC | Chartered Accountants & Business Advisors

Ludhiana

CA

View Details
Company
ARTICLESHIP 01 October 2026
Articled Assistant

KPSN & Associates LLP

Chennai

CA Inter

View Details
Company
ARTICLESHIP 30 September 2026
CA Article Assistant

CA Suraj Garg & Associates

New Delhi

CA Final

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
07 October 2026
Senior Account Manager

Amplio Invest

Mumbai

M.Com

View Details
Company
14 October 2026
GST & TDS ASSISTANT

AGGARWAL SANJAY & ASSOCIATES

New Delhi

B.Com

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details