Asked by MATTHEW NESTER on Jun 19, 2024
Verified
FASB established the use of the terms "probable, " "reasonably possible, " and "remote." It adopted these terms because
A) the available statistical techniques are not exact enough
B) future events can vary over a wide range
C) future gains are not easy to estimate
D) unnecessary estimates should not be recorded in the financial records
Statistical Techniques
Mathematical methods used to collect, analyze, interpret, and present numerical data for the purpose of making informed decisions.
Future Events
Events that have not yet occurred but are expected to happen and can affect financial outcomes or business operations.
- Pinpoint and contrast the various contingencies and their specific treatment in financial documentation.
Verified Answer
DR
Durga RamasamyJun 20, 2024
Final Answer :
B
Explanation :
FASB established these terms to provide a standardized way for companies to communicate the likelihood of future events affecting financial statements. It recognizes that future events can vary over a wide range and the terms allow for companies to communicate the likelihood of those events in a consistent manner.
Learning Objectives
- Pinpoint and contrast the various contingencies and their specific treatment in financial documentation.
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