I’VE GOT A bit of time before my next class, Susan thought. Maybe I’ll tackle another Pardon-Me question before I go.

     “Question 4: A contingent liability is just another fancy name for a loss.”

     I’d have to pick “I don’t know” for this one, Susan figured.

     The pop-up window read: “You’re in good company. Most people could not answer this one with any sense of assurance. Even CPAs are not in agreement. So first off, let’s define our terms. A contingent liability is a loss (liability) based on some contingency -- one of several possible things that could happen in the future.”

     Well, why didn’t you say so! Susan exclaimed to herself. Or, more to the point, why didn’t either side say that during the trial?

     She continued reading: “Why this term never came into play during the trial is because it’s an accounting term. You’ve probably never heard of it before. It was not in the best interest of the prosecutor to explain it. The defense attorney and defendant are not CPAs. They didn’t recognize the significance of it until it was too late.

     “You may recall a heated discussion about a negative $5,400 on the first Ameritrade statement. It is this number -- and its category on subsequent statements -- that is a contingent liability.”

     I do seem to recall something about $5,400 being lost on the first Ameritrade statement, Susan thought. But I don’t know to this day what was so important about it.

     The pop-up continued: “Suppose I told you, ‘If a tree falls on your car, it’s gonna cost you.’ Does that mean that a tree will definitely fall on your car? No. It means there’s the possibility that a tree will fall. And if it does -- if and only then, will it cost you anything.

     “In all likelihood, a tree will not fall on your car. Which means that, in all likelihood, you won’t be paying a lot of money on car repairs.”

     That makes sense, Susan thought, although I’m not sure how that fits in with Ponzi schemes.

     “So,” the screen continued, “to answer the toss-up question: a contingent liability is not necessarily a loss. I say ‘not necessarily’ because if a tree actually did fall on your car, you would, at that time, certainly sustain a loss. But the fact that the liability is called ‘contingent’ means that it hasn’t happened yet. It may, at sometime in the future. Then again, it may never happen. Until it does, though, it’s not a loss."

     “I’m late.” Susan found herself talking out loud to the screen. “Later.”