A loss contingency that is remote and cannot be reasonably estimated
A) may be disclosed in a note to the financial statements.
B) must be disclosed in a note to the financial statements.
C) must be reported in the body of the financial statements.
D) is permitted to be reported in the body of the financial statements.

Question

Quizplus · Accepted Answer

A loss contingency that is remote and cannot be reasonably estimated may be disclosed in a note to the financial statements. Disclosure in the body of the financial statements is not required since the likelihood of the loss occurring is remote and the amount cannot be reasonably estimated. However, disclosure in a note provides users of the financial statements with information that may be relevant in evaluating the entity's financial position and potential risks.

A Loss Contingency That Is Remote and Cannot Be Reasonably