Problem
Consider this example of the Full Disclosure principle:
A train derails and causes significant personal and property damage. At year end, claims are still being filed by the injured parties and there are quite a few lawsuits asking for outrageous money.
• Would you accrue a "contingent" liability for any of the probable payouts in the future?
• How would you go about estimating the potential liability from this incident?
• The Footnotes to the financial statements are also a form of disclosure. Should any amount not be accrued and only disclosed in the footnotes?
• Why bother?
The response should include a reference list. Using one-inch margins, Times New Roman 12 pnt font, double-space and APA style of writing and citations.