Question

Decorative Concrete produces a concrete overlay for residential and commercial concrete flooring. Customers have complained that one of the products results in excessive cracking. The likelihood the company will incur a loss on this product is probable and the amount of the loss is estimated to be somewhere between $1.7 and $3 million.
1. Should this contingent liability be reported, disclosed in a note only, or both?

Answer 1

Thank you for posting your question here at brainly. I hope the answer will help you. Feel free to ask more questions here. The contingent liability I think should be reported, to avoid future disaster. The company can pull out the product or announce to the public to return the product, it will be a great loss for the company the customer will be the one to complaint that someone lost her/his life because of there product. Prevention is better that anything else.