Which of the following contingent losses would require footnote disclosure only?
A)A likely loss with an amount that can be reasonably estimated
B)A likely loss of a known amount
C)An unlikely loss
D)A likely loss with an amount that cannot be reasonably estimated

Question

Quizplus · Accepted Answer

A likely loss with an amount that cannot be reasonably estimated is a contingent loss that would require footnote disclosure only. This is because the amount cannot be quantified or reliably estimated, so it cannot be recorded as a liability on the balance sheet. However, it is still important information that should be disclosed in the footnotes to the financial statements. Choices A and B would require recognition on the balance sheet and disclosure in the footnotes, while choice C is unlikely to have a material impact on the financial statements and therefore may not require disclosure.

Which of the Following Contingent Losses Would Require Footnote Disclosure