The GAAP rule for recognizing loss contingencies is:
A) Loss contingencies are not recognized.
B) Loss contingencies must be recognized when the loss is at least "reasonably possible," and can be estimated.
C) Loss contingencies must be recognized as long as their likelihood is at least "slight," and the amount can be estimated.
D) Loss contingencies must be recognized as long as their likelihood is "probable," and the amount can be estimated.

Question

Quizplus · Accepted Answer

According to GAAP, loss contingencies must be recognized only when their likelihood is "probable" and the amount can be estimated. Loss contingencies that are only "reasonably possible" or "slight" are not recognized.

The GAAP Rule for Recognizing Loss Contingencies Is