All lawsuits in which a company has been named a defendant should be either disclosed in the company's notes to the financial statements,or recognized as a liability on its balance sheet.

Question

Quizplus · Accepted Answer

If the likelihood of a future obligation arising is remote,which might be the case with a frivolous lawsuit,no liability need be recognized in the financial statements or disclosed in the notes to the statements.

All Lawsuits in Which a Company Has Been Named a Defendant