is contingent liability an actual liability 
yes when they are probable even though they are only estimates due to their high probability contingent liabilities classified as probable are considered real this is why they need to be reported via accounting procedures and why they are regarded as real liabilities the bottom linea contingent liability is a potential liability that may occur in the future such as pending lawsuits or honoring product warranties if the liability is likely to occur and the amount can be reasonably estimated the liability should be recorded in the accounting records of a firm contingent liabilities are recorded to ensure that the financial statements are accurate and meet gaap or ifrs requirements gaap recognizes three categories of contingent liabilities probable possible and remote 