The present value of claim liabilities will increase as the number of years they remain unsettled increases.This difference should be treated as an expense.

Question

Quizplus · Accepted Answer

This statement is true. The longer the claims remain unsettled, the more money the company will need to pay out in the future, which increases the present value of the liability. This difference should be treated as an expense in the company's financial statements.

The Present Value of Claim Liabilities Will Increase as the Number