Explore BrainMass

Explore BrainMass

    This posting addresses how to record loss contingencies.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    For loss contingencies, if they are material, you must either disclose them or report them against income - what are the rules on when to record vs when a footnote is needed?

    © BrainMass Inc. brainmass.com June 4, 2020, 1:20 am ad1c9bdddf

    Solution Preview

    If the loss contingency is probable and the amount can be reasonably estimated, the loss contingency must be reported against income. This would put the loss contingency on the financial statements, against net income.

    If the loss contingency is ...

    Solution Summary

    The posting discusses how to treat loss contingencies based on if the contingency is material, and when a footnote is needed compared to when the contingency should be recorded.