Sell Soft is the defendant in numerous lawsuits claiming unfair trade practices Sell Soft has strong incentives not to disclose these contingent liabilities However, GAAP requires that companies report their contingent liabilities Requirements 1 Why would a company prefer not to disclose its contin...

Requirement 1 A company would prefer not to disclose its contingent liabilities because they cast a ...

Sell-Soft is the defendant in numerous lawsuits claiming unfair trade practices. Sell-Soft has strong incentives not to

Question:

Sell-Soft is the defendant in numerous lawsuits claiming unfair trade practices. Sell-Soft has strong incentives not to disclose these . However, requires that companies report their .

Requirements
1. Why would a company prefer not to disclose its ?
2. Describe how a bank could be harmed if a company seeking a loan did not disclose its .
3. What ethical tightrope must companies walk when they report ? Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...