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and welcome to the session this is Professor Farhad in this session we are completing the audit and were going to be discussing two topics contingent liabilities and the client attorneys letter so basically this is part of the completing the audit cycle and this will be the second recording which is two of the seven part that we discussed earlier so the first thing that we want to know it is what is contingent liability and one when does a contingent liability exist so first we need to understand what then this is although this is an intermediate accounting topic but its not very hard to go ahead and explain this contingent liability exists when theres a potential future payment to an outside party so somehow you have to make payment there is uncertainty about the amount of the future payment or impairment effects youre dealing with an asset you dont know what the amount youre gonna have to come up with impairment if you are dealing if youre if you have an asset thats gonna be