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Bike Rodeo Liability JCP Revision Form

Bike Rodeo Liability JCP Revision Form

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one of the far topics that are often tested in audit is this area of contingent liabilities we're going to do this sim and when we're done you're going to feel really good about the rules of contingent losses number one a company is using u.s gaap and they're a defendant in a lawsuit for three million dollars so they're being sued management believes that it's probable that the plaintiff will win but no amount of damages is considered more likely than any other however a range of losses is determined and this range of losses is determined to be between two million and three million dollars what is the proper disclosure at year end and that's exactly what the exam would want to know is a journal entry required would a footnote disclosure be enough well because the loss is both probable and estimable we have to book the loss with a journal entry at year end and that entry is going to involve an expense a loss and it's going to involve a liability but for how much well it says no amount i

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