What is a contingent liability? A contingent liability is a potential liability…it depends on a future event occurring or not occurring. For example, if a parent guarantees a daughter’s first car loan, the parent has a contingent liability. If the daughter makes her car payments and pays off the loan, the parent will have no liability. If the daughter fails to make the payments, the parent will have a liability. If a company is sued by a former employee for $500,000 for age discrimination,
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A contingent liability is a potential loss that may occur at some point in the future, once various uncertainties have been resolved. This liability is not yet an actual, confirmed obligation. The exact status of a contingent liability is important when determining which liabilities to present in the balance sheet or in the attached disclosures. It is of interest to a financial analyst, who wants to understand the probability of such an issue becoming a full liability of a business, which could impact
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Compiled AASB Standard AASB 137 Provisions, Contingent Liabilities and Contingent Assets This compiled Standard applies to annual reporting periods beginning on or after 1 January 2011 but before 1 July 2013. Early application is permitted. It incorporates relevant amendments made up to and including 27 October 2010. Prepared on 26 November 2010 by the staff of the Australian Accounting Standards Board. Obtaining Copies of Accounting Standards Compiled versions of Standards, original
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the current period. These expenses could be incurred due to damage or faulty materials. As such, a liability has been incurred to honor the warranty at the same date as the recognition of the revenue. Based on prior experience or technical analysis, the occurrence of warranty claims can be reasonably estimated and a probable dollar estimate of the liability can be made. The contingent liability for warranties meets both of the requirements from the accrual of a loss contingency, and the estimated
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assumption of the contingent environmental liabilities. • The land underneath the gas station has potential environmental problems but Cho did not take any remediation to fix environmental problems before the exchange. • A year later, Patten pays a third party $100,000 for environmental clean-up costs to remediate the site. • The transaction does not have tax avoidance purpose. Issues The main issue encountered in this case is whether the contingent environmental liabilities assumed by Patten
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With respect to contingent liabilities, the proposal suggests that current obligations are the only ones to consider when accounting for liabilities, which in themselves should be stated separately from the events which may dictate their occurrence. The uncertainty of the events themselves should also be disclosed, when presenting the measurements for the liability. Additionally, defining contingency with regard to the amount required to settle a liability rather than the probability of its occurrence
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Attorney FEES – Lovell * American rule: - every party takes care of Attorney fees * Some states have embraced the catalyst theory – * England has fee shifting in every civil case: - there is a SC that determines nothing in England but attorney fees. * The reality with this is that there is less litigation because any losing party has to pay the others fee. * The cost should be reasonable so you can’t just say that you billed all the amount and now need to be paid. * Civil
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A contingent fee (in the United States) or conditional fee (in England and Wales) is any fee for services provided where the fee is payable only if there is a favourable result. In the law, it is defined as a "fee charged for a lawyer's services only if the lawsuit is successful or is favorably settled out of court.... Contingent fees are usually calculated as a percentage of the client's net recovery."[1] In the English legal system, it is generally referred to as no win no fee. A conditional
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Civil Justice Tutorial III i. What is proportionality and why is it so “new” in the Civil Procedure Rules? To extent does it different proportionality a. under the EHCR (Campbell case) to assess different right sets of rights b. after the Jackson reforms? Jackson is just in relation to costs – cases that are justly and in relation to proportional costs focus on the system as a whole Campbell v Mirror Group Newspaper Ltd (Costs) HL (2005) A model sues a newspaper for breach
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Ampersand LLP Beaumont, TX TO: Partner FROM: Staff Accountant DATE: March 24, 2016 ------------------------------------------------- SUBJECT: Memorandum Privileged and Confidential Relevant Facts In 2013, Mr. Hobby suffered serious bodily injury while working at a local refinery in Beaumont. On his 2013 tax return, he deducted medical expenses of $25,000. On his 2014 tax return, he deducted medical expenses of $15,000. In 2015, Hobby won a civil lawsuit connected to his injury in 2013
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