What is a contingent liability

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What is a contingent liability? How is one reflected in the financial statements and the footnotes? How is this accounting treatment consistent with the concept of a liability? How are liabilities reflected on the balance sheet (in general)? How is the accounting for bonds consistent with this answer? Why? Why can the market price of a bond be calculated as a present value of future cash flows, even when the bond is issued between coupon dates? How does the market price at issue determine the accounting for the bond under the effective interest method? Under what circumstances would the effective interest method and the straight-line method of bond amortization lead to substantively different interest expense and amortization measures? What are the arguments for using the book value method to record debt conversions? The market value method? What assumptions underlie each method? Why do firms use derivatives? How are hedges classified under SFAS 133?

Reference no: EM13152262

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