In its annual report for the 2007 fiscal year, Carnival Corporation lists Note 7, entitled Contingencies, in the Notes to the Financial Statements. This note explains three different situations with uncertain outcomes. Read Note 7 and answer the following questions. (This information can be found on either the annual report or the SEC 10-K filing at by following the links to Investor Relations.)
(a) Is the information contained in Note 7 relevant? Why or why not?
(b) Is the information contained in Note 7 material? Why or why not?
(c) List the three objectives of financial reporting.
(d) If Carnival chose to omit Note 7, would these three objectives still be met? Why or why not?

  • CreatedMarch 27, 2015
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