Essay on case 12-07

4- The committee and Ms Beckel decided to include a religious studies curriculum in the program. The principal approved of it. However, Ms Wright one of the community members did not. She threatened to show up at the committee meeting with the media. On the day of the meeting, Ms Wright showed up with a placard protesting the use of the bible in public schools.

Sparkle Company is a Nigerian diamond mining company. Sparkle is a joint venture, 50 percent owned by Shine and 50 percent owned by Brighten. Both Shine and Brighten are U.S.-based companies with their functional currency being the American dollar. Sparkle Companies functional currency is that of Nigeria, being the Naira. During 2009, Sparkle had several transactions with its joint venture owners and outside parties. The details of Sparkle’s transactions are three loans, three expenditures, and one revenue stream. The loans the company took out were $1 million from Brighten, $1 million from Shine, and 300 million Naira from a local Nigerian bank. The expenditures

The company should report the change in the contingency accrual as a 2009 event due change in estimate. ASC 250-10-45-17 specifies that “a change in accounting estimate shall not be accounted for by restating or retrospectively adjusting amounts reported in financial statements of prior periods.” Additionally, ASC 450-20-25-7 indicates that “all estimated losses for loss contingencies shall be charged to income rather than charging some to income and others to retained earnings as prior period adjustments”.

As ASC 450-20-25-2 states, an estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met:

According to ASC 410-20-25-10, instances may occur in which insufficient information to estimate the fair value of an asset retirement obligation is available. For example, if an asset has an indeterminate useful life, sufficient information to estimate a range of potential settlement dates for the obligation might not be available. In such cases, the liability would be initially recognized in the period in which sufficient information exists to estimate a range of

ASC 320-10-35-33F: “Changes in the quality of the credit enhancement should be considered when estimating whether a credit loss exists and the period over which the debt security is expected to recover.”

This case is talking about an executive retreat. It was introduced by John Matthews who was a executive had been selected to attend the two-and-a-half-week retreat. The retreat was more like a competition about academic and athletic. The team members should not only get know each other and cooperate with teammates but also need to compete with others. The whole participants were broken into five groups and their aim was to win the competition. There are several sessions about academic and athletic that the participants should complete. After the introduction part the case showed the experience of John. Before the group meeting John was wondering and worried about this retreat. When he was taking the first group meeting, he tried to learn

An accrual is not made for a loss contingency because any of the conditions in paragraph 450-20-25-2 are not met., b.  An exposure to loss exists in excess of the amount accrued pursuant to the provisions of paragraph 450-20-30-1.” Therefore, they also need to disclose the range of the possible loss with some explanation.

As per ASC 450-20-25-2, entities should accrue an estimated loss from a loss contingency by a charge to expense and a liability recorded only if both of the following conditions are met:

On a snowy January evening, the Midwestern Medical Group (MMG) management team held a retirement party for Judith Olsen, MMG president. During the evening, Olsen reflected back on the years she had worked for MMG with mixed feelings about her experience. Over the course of their eight-year integration

Where relevant to the reasonableness of the significant assumptions used by management or the appropriate application of the applicable financial reporting framework, management's intent to carry out specific courses of action and its ability to do so.

In accordance with ASC 855-10-25-3, An entity shall not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date but before financial statements are issued or are available to be issued. See paragraph 855-10-55-2 for examples of non-recognized subsequent events.

Because lawyers were able to recruit huge number of claimants,66 through 2002, it was estimated that 730,000 of the individuals who were exposed to asbestos, have brought claims against more than 8400 companies. Consequently, companies have spent $70 billion on these claims, and costs are expected to triple or even quadruple (up to $210 billion). The number of firms involved in asbestos litigations increased from 300 firms in 1982 to more than 6,000 in 2000.67 There are at least 300,000 asbestos claims pending nationwide,68 and therefore, there is a serious concern that funds will dry up quickly and future claimants will not be sufficiently compensated.67 The vast majority of these claims are coming from plaintiffs who have no impairment, because they are subject to statutes of limitations that begin when they discover evidence of asbestos exposure. These huge number of claims are exhausting a considerable money and court’s time and forcing firms into bankruptcy.69 Second-hand asbestos exposure claims, also known as take-home claims, are now an increasingly growing issue too.70 Examples of these claims involved wives who laundered their husbands’ clothes that were contaminated with asbestos from work sites for many years resulting in mesothelioma.71,72 In an attempt to plan for future litigation, there were several attempts to estimate future impact of asbestos exposure on the morbidity and mortality of the population exposed, however, future projections are challenging for several reasons. First, injuries that have occurred in the past due to asbestos exposure were rarely documented, second, the latency period between exposure and occurrence of symptoms is several decades. In addition, mesothelioma was not

In Note 1 of the footnotes, which is the Summary of Significant Accounting Policies section in the use of estimates subsection, Pinnacle expressed the preparation of financial statements in conformity with U.S. generally accepted accounting principles which requires management to make estimations and assumptions that could affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. However, the actual results could differ from those estimates due to an overestimation or an underestimation. More times than not, a mathematical equation is used to determine an estimation but estimations are not always right, they are supposed to provide a roundabout number. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for loan losses, determination of any impairment of intangible assets and the valuation of deferred tax assets. (Pinnacle Financial 2017).

› Consider an investor who predicted in July 2001 that a set of stocks will