contingent assets and liabilities

Liability

A liability is defined as the present financial obligation of an enterprise, which arises from past events. The settlement of a liability results in an outflow from the enterprises of resources embodying economic benefits.

Provision

Provision is a present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation.

Contingent liability

A Contingent liability is a possible obligation that may or may not crystallise depending on the  occurrence or non occurrence of one or more uncertain future events

Capital Expenditure

Any expenditure incurred to provide a benefit over a long-term period is capital expenditure.Capital expenditure is incurred for the purpose of increasing the capacity of the business.

Revenue Expenditure

Any expenditure incurred to provide a benefit during the current period is revenue expenditure.Revenue expenditure is incurred to maintain the earning capacity of the business.

Contingent Asset

A possible asset arises from past events and their  existence will be confirmed only after occurrence or non-occurrence of one or more uncertain future events