use the Accounting Standards Codification (ASC) database to determine the precis

Question

use the Accounting Standards Codification (ASC) database to determine the precise reference that represents the authoritative guidance in US GAAP. To illustrate, the support for principles to determine if a transfer of receivables should be accounted for as a sales or as a secured borrowing would be found in ASC section 860-10-40-3.

Your Company is a defendant in a lawsuit that could result in a material loss in the coming year if the plaintiff prevails. You are concerned that you may have to accrue a loss and a liability for this contingent result of the lawsuit. Identify the authoritative guidance that indicates the conditions under which the loss and liability will be accrued before the lawsuit is resolved.

Explanation / Answer

ASC 450-20-05-5

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