[Anonymous]

I’m seeing some conflicting anwsers in Wiley test bank compared to what I have in my notes. Please confirm if this is correct.

Remote – don’t accrue or disclose

Reasonably possible – disclose the high/low range of loss unless a better estimate within the range is given and then you should only disclose the estimate.

Probable – Accrue best estimate or low end of range and disclose the excess of high end. So lets say the range of probable loss is 100 to 500, but there is a better estimate of 200. Wiley test bank correct anwser is saying to accrue the better estimate of 200 which makes since, but then disclose the difference of what you accrued and the high end of probably loss. So you would accrue 200 and disclose the remainder of an additional possible loss of $300.

It’s not a difficult concept but I can not confirm this in my ninja notes or the book so I just wanted to make sure this was right. I would hate to get such a simple question incorrect.

[Lidis]

According to ASC Topic 450 (SFAS 5) a loss contingency is considered probable should be accrued. However, only if a range of possible loss can be estimated. The minimum amount of the range should be accrued.

[wickedrentlover]

@Revenue is right, except they forgot to add that if there's a best estimate in the range, then that amount should be used to accrue.

@determined, I just finished that section in the Becker materials, and what you wrote out seems right to me. Good luck!

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[Author]

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