Respuesta :
Answer:
Disclose
No effect on the balance sheet
Explanation:
The treatment of contingent liabilities applies.
Contingent liability is a potential liability that might arise as a result of the outcome of an uncertain future event.
The rule guiding this is that it can only be recorded in the book of account if it is probable that the future event will occur and the value can reasonably estimated.
It the outcome is not probable but reasonable as in the case of Ogden , it can only be disclosed in the note accompanying the financial statement and this is of no effect on the balance sheet.
Answer:
Disclose: No effect on the balance sheet
Explanation:
One major point to note from the scenario is that the case is not over, however, it is reasonably possible that the jury will find in favor of the plaintiff but it is not certain for sure.
For this reason, disclosure of the contingent liability will occur, however, it will have no effect on the balance sheet because it would not be recorded.
