Answered: Corporate Disclosures of Measurement…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 96.1C: Comparative Analysis: Under Armour, Inc., versus Columbia Sportswear Refer to the 10-K reports of...

See similar textbooks

Related questions

Question

Corporate Disclosures of Measurement Uncertainty Beginning in Q4 2015, several food safety incidents were reported involving Chipotle Mexican Grill, Inc. (CMG). Locate Chipotle’s 2018 Form 10-K and describe how the company describes its methods for estimating its contingent liability associated with its various food safety legal proceedings. Describe how this disclosure supports the accrual for such losses in Chipotle’s financial statements, and describe how this disclosure meets the Codification’s requirements for loss contingency disclosures. Next, look up the SEC’s Dear CFO Letter (2010) on loss contingency disclosures, aimed at improving transpar- ency in public companies’ loss contingency disclosures. Does this disclosure appear to satisfy the SEC guidance in that letter? Explain.

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Current liabilities, Provisions and Contingencies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions