If a loss contingency is reasonably possible or the amount cannot be reasonably estimated, _______.
A)disclosure should occur in both the financial statements and the notes to the financial statements
B)disclosure should occur in the financial statements only
C)only a disclosure in the notes is required
D)then no disclosure is required

Question

Quizplus · Accepted Answer

When a loss contingency is reasonably possible or the amount cannot be reasonably estimated, only a disclosure in the notes to the financial statements is required. This provides users of the financial statements with information about the potential loss without requiring an estimation of the loss to be recognized in the financial statements themselves.

If a Loss Contingency Is Reasonably Possible or the Amount