SSAP 5: Liabilities, Contingencies, Imparment of Assets

Question 1

Three essential components of liabilities

Answer 1

1) Present responsibility to transfer assets at specified date based on occurrence of a specified event
2) Entity has little/no discretion to avoid responsibility
3) Obliging event has already occurred

Question 2

Loss contingency

Answer 2

Existing condition involving uncertainty as to possible loss to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur

Question 3

To charge loss contingency to operations, two conditions

Answer 3

1) Information prior to issuance of statements indicate impairment incurred as of date of statements
2) Amount can be reasonably estimated
If judgment has been rendered, they have been met

Question 4

Joint and Several Liabilities

Answer 4

Reported as sum of amount insurer agreed to pay based on agreements with co-obligors and additional amount expected to pay on behalf of co-obligors

Question 5

Disclosures for Joint and Several Liabilities

Answer 5

Nature of agreement
Total outstanding
Carrying amount of liability