No disclosure is required because an EPA claim is as yet unasserted, and an assessment is not probable. Even if an unfavorable outcome is thought to be probable in the event of an assessment and the amount is estimable, disclosure is not required at this time unless an unasserted claim is probable.
2. This is a gain contingency. Gain contingencies are not accrued even if the gain is probable and reasonably estimable. The gain should be recognized only when realized.
If the amount is deemed material, Barone will disclose information in notes to the financial statements and ensure the wording is not misleading as to the eventual outcome.

Question

Quizplus · Accepted Answer

The Answer of No disclosure is required because an EPA claim is as yet unasserted, and an assessment is not probable. Even if an unfavorable outcome is thought to be probable in the event of an assessment and the amount is estimable, disclosure is not required at this time unless an unasserted claim is probable.
2. This is a gain contingency. Gain contingencies are not accrued even if the gain is probable and reasonably estimable. The gain should be recognized only when realized.
If the amount is deemed material, Barone will disclose information in notes to the financial statements and ensure the wording is not misleading as to the eventual outcome.

No Disclosure Is Required Because an EPA Claim Is as Yet