D is corrent. Per ASC Topic 450, an estimated loss from a loss contingency should be accrued only if it is probable that a liability exists at the balance sheet date and if the loss is reasonably estimable. The contingency meets the “probable” requirement. In addition, the best estimate of the loss is $600,000. Therefore, a contingent loss of $600,000 should be reported on December 31, year 1.
A is incorrect. Per ASC Topic 450, an estimated loss from a loss contingency should be accrued only if it is probable that a liability exists at the balance sheet date and if the loss is reasonably estimable. The contingency meets the “probable” requirement. In addition, the best estimate of the loss is $600,000. Therefore, a contingent loss of $600,000 should be reported on December 31, year 1.
A is incorrect. Per ASC Topic 450, an estimated loss from a loss contingency should be accrued only if it is probable that a liability exists at the balance sheet date and if the loss is reasonably estimable. The contingency meets the “probable” requirement. In addition, the best estimate of the loss is $600,000. Therefore, a contingent loss of $600,000 should be reported on December 31, year 1.
A is incorrect. Per ASC Topic 450, an estimated loss from a loss contingency should be accrued only if it is probable that a liability exists at the balance sheet date and if the loss is reasonably estimable. The contingency meets the “probable” requirement. In addition, the best estimate of the loss is $600,000. Therefore, a contingent loss of $600,000 should be reported on December 31, year 1.
|
