The Uncertainty Associated with a Loss Contingency Can Vary Widely

question 128

Essay

The uncertainty associated with a loss contingency can vary widely. GAAP requires companies to categorize the likelihood of occurrences of the loss into three categories. What are these three categories and list three common loss contingencies?

Appreciate the evolving role of public and nonprofit administrators in today's society.

Understand the importance of communication and trust in fostering cooperation among partners.

Understand the concepts and accounting treatments for investments in available-for-sale securities.

Recognize the reporting requirements for investments under the equity method.

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Definitions:

Non Obstante Veredicto

A legal term meaning "notwithstanding the verdict," which allows a judge to reverse the decision of a jury if it is contrary to the law or evidence.

Settlement

The resolution of a dispute or lawsuit outside of court through negotiation, which results in an agreement that both parties consent to.

Motion To Dismiss

A legal motion filed by a defendant, requesting the court to dismiss a case on certain grounds before going to trial.

Summary Judgment

A legal procedure where the court makes a decision based on statements and evidence without going to trial.