Contingent liabilities

Obligations to pay costs associated with a possible, but uncertain, future event. Because there is no obligation to pay unless the event occurs, contingent liabilities might not be formally listed as a liability on an organisation’s balance sheet. Contingent liabilities might be explicit or implicit: 

• explicit contingent liabilities are contractual commitments to make certain payments if a particular event occurs—the basis of these commitments can be
  contracts, laws, or clear policy statements;
• implicit contingent liabilities are political or moral obligations to make payments, for example in the event of a crisis or a disaster—governments do not recognise these liabilities until a particular event occurs; implicit contingent liabilities are difficult to assess, let alone manage in a consistent manner, precisely because of
  their implicit nature (Centre for Disaster Protection).