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Unformatted text preview: Contingent liabilities is a potential liability that has risen as the result of a past event; not an effective liability until some future event occurs. (lawsuits, Environmental problems, product warranties) 1) a liability that is both probable and capable of being reasonably estimated must be recorded and reported on the balance sheet 2) a liability that is reasonably possible must be disclosed in a not in the financial statements whether it can be estimated or not. 3) remote contingencies are not disclosed. Present value concepts *Present value (PV) is the current value of an amount to be received in the future; a future amount discounted for compound interest. o Present Value of a single amount: The present value of a single amount is the worth to you today of receiving that amount some time in the future....
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This note was uploaded on 03/19/2008 for the course ACCT 201 taught by Professor Anothony during the Fall '07 term at Michigan State University.
- Fall '07