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Chapter 17 - Solution Manual

Types of loss cont the following are examples of loss

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> Types of Loss Contingencies 05-10 The following are examples of loss contingencies that are discussed in this Subtopic: a. Injury or damage caused by products sold b. Risk of loss or damage of property by fire, explosion, or other hazards c. Actual or possible claims and assessments d. Threat of expropriation of assets e. Pending or threatened litigation. 450-20-15 Scope and Scope Exceptions General > Overall Guidance
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370 15-1 This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 450-10-15, with specific transaction exceptions noted below. > Transactions 15-2 The following transactions are excluded from the scope of this Subtopic because they are addressed elsewhere in the FASB ASC: a. Stock issued to employees, which is discussed in Topic 718. b. Employment-related costs, including deferred compensation contracts, which are discussed in Topics 710, 712, and 715. However, certain postemployment benefits are included in the scope of this Subtopic through application of paragraphs 712-10-25-4 through 25-5. c. Uncertainty in income taxes, which is discussed in Section 740-10-25. d. Accounting and reporting by insurance entities, which is discussed in Topic 944. 450-20-20 Glossary Contingency An existing condition, situation, or set of circumstances involving uncertainty as to possible gain (gain contingency) or loss (loss contingency) to an entity that will ultimately be resolved when one or more future events occur or fail to occur. Gain Contingency An existing condition, situation, or set of circumstances involving uncertainty as to possible gain to an entity that will ultimately be resolved when one or more future events occur or fail to occur. Loss Contingency An existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses. Probable The future event or events are likely to occur. Reasonably Possible The chance of the future event or events occurring is more than remote but less than likely. Remote The chance of the future event or events occurring is slight. 450-20-25 Recognition General Rule 25-1 When a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. As indicated in the definition of contingency, the term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses. The Contingencies Topic uses the terms probable , reasonably possible, and remote to identify three areas within that range.
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