Definition: Guarantees / contingent assets and liabilities

Category: National accounts

Contingent assets are contractual arrangements between institutional units, and between them and the rest of the world, which specify one or more conditions which must be fulfilled before a financial transaction takes place.  Examples are guarantees of payment by third parties, letters of credit, lines of credit, underwritten note issuance facilities (NIFs) and many of the derivative instruments.  In the system, a contingent asset is a financial asset in cases where the contractual arrangement itself has a market value because it is tradable or can be offset on the market.  Otherwise, a contingent asset is not recorded in the system. http://ec.europa.eu/eurostat/product?code=CA-15-96-001&mode=view