Accounting for contingent liabilities depends on the likelihood that a future event will occur.

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Accounting for contingent liabilities is based on the likelihood that a future event will occur, as per the accounting standard ASC 450. The company should recognize, disclose, or footnote the contingent liability in its financial statement, depending on the probability of occurrence and the estimated amount of potential liability.

Accounting for Contingent Liabilities Depends on the Likelihood That a Future