1. Define and briefly discuss a losscontingency.2. What are the similarities and differences ofthe accounting treatment and financialstatement reporting of a loss contingencybetween U.S. GAAP and IFRS?3. As a manager, would you like to report adebt as a current or non-current liability if youhad a choice? Explain. And under what kind ofcircumstances could a short-term obligationbe reported as a non-current liability?

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1. Define and briefly discuss a loss contingency.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 14QE

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Question

1. Define and briefly discuss a loss
contingency.
2. What are the similarities and differences of
the accounting treatment and financial
statement reporting of a loss contingency
between U.S. GAAP and IFRS?
3. As a manager, would you like to report a
debt as a current or non-current liability if you
had a choice? Explain. And under what kind of
circumstances could a short-term obligation
be reported as a non-current liability?

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