Neer Co.has a probable loss that can only be reasonably estimated within a range of outcomes.No single amount within the range is a better estimate than any other amount.The loss accrual should be

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The midpoint of the range is the best estimate for accrual because it represents the most likely outcome. This is in line with the conservatism principle of accounting, which states that losses should be recognized when they are probable and reasonably estimable but not overstated or understated. Choosing the maximum or minimum of the range could result in overstating or understating the loss, respectively. Choosing zero would be inappropriate as there is a probable loss that needs to be recognized.

Neer CoHas a Probable Loss That Can Only Be Reasonably Estimated