Contingent Liabilities: Issues and Practice

October 1, 2008

Preview Citation

Format: Chicago

Aliona Cebotari. Contingent Liabilities: Issues and Practice, (USA: International Monetary Fund, 2008) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Contingent liabilities have gained prominence in the analysis of public finance. Indeed, history is full of episodes in which the financial position of the public sector is substantially altered-or its true nature uncovered-as a result of government bailouts of financial or nonfinancial entities, in both the private and the public sector. The paper discusses theoretical and practical issues raised by contingent liabilities, including the rationale for taking them on, how to safeguard against the fiscal risks associated with them, how to account and budget for them, and how to disclose them. Country experiences are used to illustrate ways these issues are addressed in practice and challenges faced. The paper also points to good practices related to the mitigation, management and disclosure of risks from contingent liabilities.

Subject: Budget planning and preparation, Contingent liabilities, Financial statements, Fiscal risks, Insurance

Keywords: Balance sheet, Government guarantee, Insurance coverage, Net present value, Risk premium, WP

Publication Details

Pages:

60
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/245
Stock No:

WPIEA2008245
ISBN:

9781451871036
ISSN:

1018-5941

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