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Existing condition involving uncertainty as to possible gain or loss to an enterprise that will utlimately be resolved when one or more future events occur or fail to occur
Likelihood that future event will confirm loss can range
- Probable: future event likely to occur
- Reasonably possible: more than remote but less than likely
- Remote: chances of future event occuring is slight
2 conditions necessary for accruing a contingency as a acharge to income
- Info available prior to issuance of financial statements indicates that it is probable that an asset has been impaired or a liability incurred
- Amt of the contigency can be reasonably estimable
When reasonable estimate of contingency is a range
- When some amt amt is better, that amt is accrued
- When no amt is better, the minimum amt is accrued
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