A liability for a contingent loss will be accrued and reported on the balance sheet if the occurrence of the obligation is at least reasonably possible.

Question

Quizplus · Accepted Answer

A liability for a contingent loss is accrued and reported on the balance sheet only if the loss is both probable and the amount can be reasonably estimated. If it is only reasonably possible, it is disclosed in the notes to the financial statements, not accrued.

A Liability for a Contingent Loss Will Be Accrued and Reported