With Regard to Reporting of Contingent Liabilities, U

question 62

Multiple Choice

With regard to reporting of contingent liabilities, U.S. GAAP and International Financial Reporting Standards (IFRS) differ in defining the term "probable". Which of the following is correct with regard to defining "probable"?

• A)Under U.S.GAAP, "probable" means an event is more likely than not to occur.
• B)Under IFRS, "probable" means an event is likely to occur.
• C)Under IFRS, "probable" means an event is more likely than not to occur.
• D)Under U.S.GAAP, "probable" means an event is more than likely to occur.

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Definitions:

Agricultural Risk Coverage

A form of crop insurance that pays out if the total revenue generated by all the farmers planting a given crop in a given county falls below a predetermined value.

Price Loss Coverage

A form of crop insurance that pays participating farmers if the market price of their output falls below a predetermined value.

Inelastic

Describes a situation where the demand or supply of a good is not significantly affected by changes in price.

Supply

The total amount of a good or service that is available to consumers.