If a loss is expected on subsequent disposal of a business segment, the estimated loss is recognized in the financial statements as of the measurement date.

Question

Quizplus · Accepted Answer

This is consistent with the guidance under ASC 205-20-45-3, which states that if an expected loss on disposal of a business segment meets the definition of a loss contingency, it should be accrued in the financial statements as of the measurement date.

If a Loss Is Expected on Subsequent Disposal of a Business