The Pine Corp

question 88

Multiple Choice

The Pine Corp. learns in July 2018 some new information about a lawsuit that first started in 2015. Pine Corp. had shown a liability of $2,000,000 related to this lawsuit in its December 31 balance sheets for 2015, 2016, and 2017. It now believes the liability will be only $1,500,000. Under GAAP, Pine Corp. should

• A) Restate the 2015, 2016, and 2017 statements to show a $1.5 million liability
• B) Restate only the 2017 statements to show a $1.5 million liability
• C) Not restate any prior year's liability, but reflect a benefit of $500,000 in the 2018 financial statements and disclose the change in estimate
• D) Not restate any prior year's liability, but reflect a benefit of $500,000 in the 2018 financial statements. It should not disclose the change in estimate

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Definitions:

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The background or social class from which an individual comes, including factors like family wealth, education, and professional status, which can influence opportunities and life trajectory.

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