Financial Statement Note Disclosure Is Required for Material Potential Losses

question 127

Multiple Choice

Financial statement note disclosure is required for material potential losses when the loss is at least reasonably possible:

• A) Only if the amount is known.
• B) Only if the amount is known or reasonably estimable.
• C) Unless the amount is not reasonably estimable.
• D) Even if the amount is not reasonably estimable.

---

Definitions:

Fixed Cash Receipts

Fixed Cash Receipts refer to the regular, unchanging amount of cash received by a business or individual, typically structured within certain financial arrangements or revenue models.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Lag Strategy

A deliberate decision to not be a first mover in an industry or market, observing and reacting to competitors' actions.

Straddle Strategy

A trading strategy that involves purchasing both a call option and a put option for the same underlying asset, with the same strike price and expiration date, allowing investors to benefit from significant price movements in either direction.