To report a loss and a liability in the financial statements, the cause for litigation must have occurred on or before the date of the financial statements.

Question

Quizplus · Accepted Answer

For a loss and a liability from litigation to be reported in financial statements, the event leading to the litigation must have occurred before the financial statement date, as accounting principles require that only existing obligations as of the balance sheet date are recognized.

To Report a Loss and a Liability in the Financial