What are Contingent Liabilities?

CONTINGENT LIABILITIES AND COMMITMENTS AND OTHER NOTES
The revised Schedule makes a clear distinction between contingent liabilities and commitments.
Contingent Liabilities
It has to be sub-classified as :
  1. Claims against the company not acknowledged as debt
  2. Guarantees (the separate disclosures required by existing Schedule VI regarding guarantees given on behalf of directors / other officers are not required, though some of these would nevertheless be disclosed under AS 18)
  3. Other money for which the company is contingently liable.
For example : Arrears of preference dividend and Bills under discount.
Commitments
These include :
  1. Estimated amount of contracts remaining to be executed on capital account and not provided for
  2. Uncalled liability on shares and other investments partly paid
  3. Other commitments (specifying nature).