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Accrual of a loss contingency: What is required?

The two basic requirements for the accrual of a loss contingency are supported by several basic concepts of accounting. Four of these concepts are periodicity (time periods), measurement, objectivity, and relevance.

Discuss how the two basic requirements for accrual of a loss contingency relate to the four concepts listed above.

Response is 285 words of original commentary.

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Response is 285 words of original commentary. Please re-word and add your own thoughts prior to submitting.

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The two basic requirements to accrue a loss is that it be probable that the loss is going to occur and reasonably able to be estimated. Here is how these relate to the conceptual framework:

Periodicity - This concept is about timeliness. In other words, giving the information periodically so that decision makers ...

Solution Summary

Response is 285 words of original commentary. Four main concepts are described and discussed in everyday language suitable for novice to intermediate.

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