The following selected circumstances relate to pending lawsuits for Erismus, Incorporated Erismus's fiscal year ends on December 31. Financial statements are issued in March 2025. Erismus prepares its financial statements according to IFRS. Required: Indicate the amount Erismus would record as an asset, a liability or if no accrual would be necessary in the following circumstances. 1. 2. 3. 4. 5. 1. Erismus is defending against a lawsuit. Erismus's management believes the company has a slightly worse than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,000,000. 2. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages could fall anywhere in the range of $2,000,000 to $4,000,000, with any damage in that range equally likely. 3. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages will eventually be $5,000,000, with a present value of $3,500,000. 4. Erismus is a plaintiff in a lawsuit. Erismus's management believes it is probable that the company eventually will prevail in court, and that if it prevails, the judgment will be $1,000,000. 5. Erismus is a plaintiff in a lawsuit. Erismus's management believes it is virtually certain that the company eventually will prevail in court, and that if it prevails, the judgment will be $500,000. Classification Asset Amount
The following selected circumstances relate to pending lawsuits for Erismus, Incorporated Erismus's fiscal year ends on December 31. Financial statements are issued in March 2025. Erismus prepares its financial statements according to IFRS. Required: Indicate the amount Erismus would record as an asset, a liability or if no accrual would be necessary in the following circumstances. 1. 2. 3. 4. 5. 1. Erismus is defending against a lawsuit. Erismus's management believes the company has a slightly worse than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,000,000. 2. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages could fall anywhere in the range of $2,000,000 to $4,000,000, with any damage in that range equally likely. 3. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages will eventually be $5,000,000, with a present value of $3,500,000. 4. Erismus is a plaintiff in a lawsuit. Erismus's management believes it is probable that the company eventually will prevail in court, and that if it prevails, the judgment will be $1,000,000. 5. Erismus is a plaintiff in a lawsuit. Erismus's management believes it is virtually certain that the company eventually will prevail in court, and that if it prevails, the judgment will be $500,000. Classification Asset Amount
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
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 17P: On December 31, 2019, Vail Company owned the following assets: Vail computes depreciation and...
Related questions
Question
Transcribed Image Text:The following selected circumstances relate to pending lawsuits for Erismus, Incorporated Erismus's fiscal year
ends on December 31. Financial statements are issued in March 2025. Erismus prepares its financial statements
according to IFRS.
Required:
Indicate the amount Erismus would record as an asset, a liability or if no accrual would be necessary in the
following circumstances.
12345
1.
2.
3.
4.
5.
1. Erismus is defending against a lawsuit. Erismus's management believes the company has a slightly worse
than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,000,000.
2. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will
lose in court. If it loses, management believes that damages could fall anywhere in the range of
$2,000,000 to $4,000,000, with any damage in that range equally likely.
3. Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will
lose in court. If it loses, management believes that damages will eventually be $5,000,000, with a present
value of $3,500,000.
4. Erismus is a plaintiff in a lawsuit. Erismus's management believes it is probable that the company
eventually will prevail in court, and that if it prevails, the judgment will be $1,000,000.
5. Erismus is a plaintiff in a lawsuit. Erismus's management believes it is virtually certain that the company
eventually will prevail in court, and that if it prevails, the judgment will be $500,000.
Classification
Asset
Amount
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
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.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning