Contingent assets are those possible assets whose existence depends on unpredictable future events which may or may not occur and these events are fully or partially out of control of the related individuals.
Though the contingent asset’s value can be estimated, these assets will not be recorded in the books like the contingent liability.
Contingent assets information should be provided as a source of inflow but should NOT be recognized.
If this asset is getting recognized and any individual is able to assure about the income realization then this asset can’t be a contingent asset.
The very popular example of a contingent asset is a court case filed by entity A against entity B for using of entity A’s copyright without their permission.
In case there is a strong possibility shows that entity A will win the case then that future receivable amount will be the contingent asset but it will not be reported till the time the court case will not finalize.
During this time entity, A can make the comments in their financials that there is a possibility that entity A will win the court case.