Lawsuit Contingent Liability
Accounting, how to record a contingent liability?
I understand that a contingent liability, for example, the possible outcomes of a trial must be recorded somewhere. How should this in terms of title, the type of information recorded, etc.
FASB 5 provides that: – If it is likely that the event took place on or before the date of the financial statements (for example, a complaint) and the amount of the financial effects can be reasonably estimated (eg his lawyer says he is very confident that the matter can be settled for $ 50,000 to $ 75,000), after recording a liability in the books. If these two conditions can be met, then make a note of disclosure to discuss the nature of the emergency (eg, pollution, asbestos, etc.) and the range of possible outcomes.
6 – Current Liabilities
