kill Hardware is the plaintiff in a $16 million lawsuit filed against a supplier. The litigation is in final appeal and legal counsel advises that it is virtually certain that Skill will win the lawsuit and be awarded $12 million. How should Skill account for this event? check any boxes below  The contingency is acrrued The contingency is not accrued This is a gain contingency This is a loss contingency It is probable that the confirming event will occur The contingency can be reasonably estimated A disclosure note should describe the contingency None of these

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.