If a contingency will probably occur and can be reasonably estimated, the financial statement amounts would need to be adjusted.

Question

Quizplus · Accepted Answer

If a contingency is likely to occur and can be estimated, the financial statements should be adjusted to reflect the potential impact on the company's financial position and performance. This is in accordance with generally accepted accounting principles (GAAP). Failure to properly account for contingencies could result in misstatement of financial statements and potential legal or regulatory consequences.

If a Contingency Will Probably Occur and Can Be Reasonably