Chapter 13 - Test Bank 189 - corresponding obligations be...

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the above described liabilities, it is not reasonably possible that it would incur a loss exceeding the amount recognized at December 31, 2013, with respect thereto which would be material relative to the consolidated financial position, results of operations, or liquidity of Goodday. 126. Briefly explain the GAAP requirement from which the costs/obligations for environmental cleanup and product liability/tort claim matters were accrued in the financial statements. GAAP regarding accounting for contingencies requires that contingent losses (and the
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Unformatted text preview: corresponding obligations) be recorded (accrued) when the loss is both probable and the amount is known or reasonably estimable. Goodday based its analysis on pending claims, historical experience, and current trends, such as recent case verdicts with similar manufacturers. AACSB: Analytic AICPA FN: Measurement Blooms: Analyze Difficulty: 2 Medium Learning Objective: 13-05 Identify situations that constitute contingencies and the circumstances under which they should be accrued. Topic: Identify contingencies...
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  • Spring '11
  • Shirey
  • Generally Accepted Accounting Principles, The Loss, consolidated financial position, Goodday, product liability/tort claim

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