Fisher Company Has Been Named as the Defendant in a Class

question 42

Short Answer

Fisher Company has been named as the defendant in a class action lawsuit.Indicate whether each of the following statements regarding the lawsuit is true or false.
_____ a)If the outcome is likely,a liability should be recognized on the balance sheet for the full amount of the suit,even if the company's attorneys estimate the outcome to be much lower.
_____ b)If the outcome is likely,but cannot be reasonably estimated,the contingency should be disclosed in the notes to the financial statements.
_____ c)If the outcome is reasonably possible,the contingency should be disclosed in the notes to the financial statements.
_____ d)Every lawsuit,regardless how frivolous,should be disclosed in the notes to the financial statements.
_____ e)If an active hurricane season has been predicted for the Florida gulf coast,businesses in that region should not disclose contingencies for catastrophic loss in the notes to their financial statements.

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Definitions:

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