Abstract: According to the conservatism of conducting accounting treatment,it is suggested in this paper that the contingent assets be defined separately if the debtor can clear his debts;otherwise,the contingent assets should not be defined,but should be reported in the notes of balance sheet.It is also suggested to establish subject of “ contingent asset",accounting the mortgage security assets and the hypothecate security assets on the date of balance sheet,which will be converted into money,sold off at reduced prices,or sold off by the debtor ,for he is unable to clear his debts.The content of the subject will be listed alone in the balance sheet so as to be distinguished from other asset items.By this way,accounting treatment to contingent liabilities formed by all kinds of security pattern can be conducted.

Key words: liability security, contingent event, contingent asset, guaranty security, mortgage security, hypothecate security, accounting treatment