contingent liability

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