A contingent liability is recorded when it can be estimated, else it should be disclosed. In this case we cannot ascertain whether payment is needed. Public Private Partnerships: A discourse of Contingent Liability Crystallization [Momoh, Mohammed Aliu] on Amazon.com. How Crystallization Works When an investor buys a capital asset , an increase (or decrease) in the value of the security does not translate to a profit (or loss). However, AO disregarded the claim of assessee and treated the same as contingent liability as it has not accrued during the previous year. Public Private Partnerships: A discourse of Contingent Liability Crystallization Contingent Liability: A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. *FREE* shipping on qualifying offers. For example, a suit is under litigation but results of the same is not known. It merely represents the provision of liability, therefore the same was disallowed. Definition: A contingent liability is defined as a liability which may arise depending on the outcome of a specific event. Liability is said to be crystallized when there arises an obligation to pay. It is a possible obligation which may or may not arise depending on how a future event unfolds.