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What Is a Contingent Liability? Provide Two Examples of Contingencies

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Essay

What is a contingent liability? Provide two examples of contingencies.


Definitions:

Revaluation

The process of adjusting the book value of a fixed asset or security to reflect its current market value.

Fair Value

The estimated price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Business Combination

A transaction or event through which a company acquires control over one or more businesses.

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