A Client Is Involved in Several Different Law Suits That

question 18

Essay

A client is involved in several different law suits that are all pending at the end of its fiscal year.The controller wants to know if the cases must be accrued in the accounts, disclosed in the footnotes, or neither of these.
Required:
Write an explanation of the criteria used to determine whether an accrual or a disclosure is required for loss and gain contingencies.

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Definitions:

Unenforceable

Refers to a term or contract that cannot legally be enforced by the courts due to various reasons such as violating law or being against public policy.

Complaint

A formal legal document that initiates a lawsuit, detailing the facts and legal reasons the plaintiff believes are sufficient to support a claim against the defendant.

Enforceable Oral

Pertaining to oral agreements that are legally binding and can be enforced in a court of law, depending on the nature of the agreement and the jurisdiction.

Renovated

Renovation refers to the process of restoring or improving a structure, often bringing new life and functionality to an old or damaged building.