Under IFRS, If a Company Can Determine a Reasonable Estimate

question 39

Multiple Choice

Under IFRS, if a company can determine a reasonable estimate of an expected loss from a lawsuit and it is probable it will lose the suit, it should

• A) disclose the basic facts regarding the suit in the notes to its financial statements.
• B) accrue the loss.
• C) neither disclose in the notes nor accrue the loss.
• D) pay the amount estimated.

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Definitions:

Decision-Making

The cognitive process of selecting a course of action from among multiple alternatives.

Psychological Demands

The cognitive and emotional requirements placed upon an individual in the course of their work or daily activities.

Government Branch

A division or section of a government, typically within the context of the separation of powers, such as the executive, legislative, or judicial branches.

Academic Skill Levels

The degrees of competence in areas of learning and education that students achieve at various stages of their academic career.