Auditguru Auditguru Frequently Asked Questions(FAQ) Auditguru Auditguru

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Ashish PatelAshish Patel asked 3 years ago
1 Answers
RaviRavi Staff answered 3 years ago

First Contingent Liability
1st Point — Eg Transporters of company are demanding compensation for accidents, company is not accepting it–> this is claims which are not yet acknowledged by company. as they may become liability in future it is contingent liability.
2nd Point — any other situation where company is liable to pay, apart from examples covered in all other points (guarantee / above point) of contingent liability (so it is a residuary point) Eg- outstanding betting contract / derivative contract etc
Commitment means we have promised to pay as we get consideration for the same.
1st Point Example :- so we signed commitment with engineering firm, you renovate our factory we pay you renovation charges.
2nd Point:- we have shares of FV 10, and Rs 3 is uncalled. company can any time call it make share fully called and ask for money. its our duty / commitment to pay in return of making shares fully paidup

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