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Contingent liaility usually arise when company have a significant financial risk indirectly, for example, Company issuing letter of guarantee to their client without paying the value of the guarantee and used through the bank facility they have, in this case this is a contingent liaility. This guarantee value will not appear anywhere in the final account of the books, but it should be shown as a separate notes in the financial statement/Audit Report.
A contingent liability is one where the outcome of an existing situation is uncertain, and this uncertainty will be resolved by a future event. a contingent liability is recorded in the books of accounts only if the contingency is probable and the amount of the liability can be estimated
It is shown in the balance sheet liabilities side
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