Orange Co. can estimate the amount of loss that will occur if a foreign government expropriates some of the company's asset in that country. If expropriation is reasonably possible, a loss contingency should be:
A)Disclosed but not accrued as a liability.
B)Disclosed and accrued as a liability.
C)Accrued as liability but not disclosed.
D)Neither accrued as a liability nor disclosed.

Question

Quizplus · Accepted Answer

If a loss is reasonably possible but not probable, it should be disclosed in the financial statements but not accrued as a liability.

Orange Co Can Estimate the Amount of Loss That Will Occur