Question
In: Finance
A firm expects that they may prevail in a lawsuit and estimate ajudgement in their...
A firm expects that they may prevail in a lawsuit and estimate a judgement in their favor of $30 million. Where might the $30 million figure would be found:
a. | The Balance Sheet |
b. | The Income Statement |
c. | The Footnotes |
d. | All of the Above |
Solutions
Expert Solution
The lawsuit and estimated judgement is a subsequent event and are estimation of the outcome. This may or may not occur based on the probability. Hence, we cannot include this amount on the income statement or balance sheet. These need to appear at the bottom of the financial statements in the footnotes.
a firm expect that they may prevail in a lawsuit and estimate a judgement in their favour of $30 million where might the $30 million figure would be found-
C. The footnotes
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