Contingent liabilities (ETF 72)

A1B.17.

Contingent liabilities (ETF 72) are defined in paragraph 7.251 of the IMF GFSM 2014 as obligations that do not arise unless a particular, discrete event(s) occurs in the future. The key difference between contingent liabilities and actual liabilities is that one or more conditions must be fulfilled before a financial transaction is recorded. Contingent liabilities are not recognised as liabilities prior to their associated condition(s) being fulfilled. Contingent liabilities are further discussed in Chapter 13 Part C of this manual. In GFS, contingent liabilities are further classified as:

• Explicit contingent liabilities (ETF 721); and
• Implicit contingent liabilities (ETF 722).