Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

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Answer 1

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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.

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

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Which of the following statements about Loss Contingencies is TRUE? According to the practice of accounting conservatism, contingency losses do not have to be accrued until they are confirmed, while contingency gains have to be recorded when the event confirming their receipt is probable. Remote Losses do not require disclosure. According to the U.S. GAAP, a loss contingency must be accrued by a charge to income if any of the two conditions is met: 1) it is probable that an asset has been impaired, or a liability has been incurred at the date of the financial statements; 2) the amount of the loss can be reasonably estimated. If a loss is probable but cannot be estimated, it shall not be disclosed in the financial statements.

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Answer 2

Question

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.

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

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Answer 3

Question

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.

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

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Answer 4

Question

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.

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

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Answer 5

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

Answer 6

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

Answer 7

Chapter 9, Problem 3C

1.

To determine

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

Answer 8

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

Answer 9

2.

To determine

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 9 - Prob. 1GI Ch. 9 - Prob. 2GI Ch. 9 - List the three characteristics of a liability....Ch. 9 - Prob. 4GI Ch. 9 - Prob. 5GI Ch. 9 - Prob. 6GI Ch. 9 - Prob. 7GI Ch. 9 - Prob. 8GI Ch. 9 - How does materiality affect the accounting for...Ch. 9 - Distinguish between an interest-bearing note and a...

Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

Solution Summary: The author explains the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

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Provide the conditions that must be satisfied for an estimated loss from a loss contingency to be accrued by the charge to income.

Identify when the disclosure is required and also specify the type of disclosure that should be made for an estimated loss from a loss contingency that needed to be accrued by a charge to income.

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