On December 12, 2016, an explosion in Vancouver Company's plant caused extensive damages to nearby properties. By march 1, 2016, claims have been asserted against Vancouver company. Vancouver company's management and their legal counsel concluded that it is probable that Vancouver company would be liable for damages estimated at P4,000,000. Vancouver company has a P6,000,000 comprehensive public liability insurance policy. This policy has a P500,000 deductible clause. What should be reported in the December 31, 2016 financial statements that were issued on March 25, 2017 in relation to the above- mentioned events?

On December 12, 2016, an explosion in Vancouver Company's plant caused extensive damages to nearby properties. By march 1, 2016, claims have been asserted against Vancouver company. Vancouver company's management and their legal counsel concluded that it is probable that Vancouver company would be liable for damages estimated at P4,000,000. Vancouver company has a P6,000,000 comprehensive public liability insurance policy. This policy has a P500,000 deductible clause. What should be reported in the December 31, 2016 financial statements that were issued on March 25, 2017 in relation to the above- mentioned events?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 4C: Pending Damage Suit Disclosure On December 15, 2019, a truck driver for Cork Transfer Company...

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