1. A company involved in a lawsuit in 2021, but the case is still in progress. If the company lose the lawsuit in 2022, the company could be liable $170 million worth of compensation and retirement benefits related to 2021. The company should provide the $170 million liability in 2021 financial staement, or not?

2. A company mentions “The adoption of SFAS No. 123(R) did not have a material impact on our stock-based compensation expense for the year ended December 31, 2006.Further, we believe the adoption of SFAS No. 123(R) will not have a material impact on our Company's future stock-based compensation expense.” Prior to January 1, 2006, the Company accounted for these plans under the fair value recognition and measurement provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation." Effective January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), "Share Based Payment" ("SFAS No. 123(R)"). Our Company adopted SFAS No. 123(R) using the modified prospective method. Is there any material misstatement that will happen when using the modified prospective method. The company has any misunderstanding of SFAS NO.123?

Answer rating: 100% (QA)

1 ANSWER The company should provide the 170 million liability in 2021 financial statement EXPLANATIO... View the full answer