Legal Claims and Litigation
Lawsuits and Pending Claims
Pending lawsuits, regulatory investigations, and legal disputes may create contingent liabilities. Management, together with legal counsel, evaluates the probability of loss and estimates the amount when determining whether recognition or disclosure is appropriate.
- Pending lawsuits.
- Patent infringement claims.
- Environmental litigation.
- Government enforcement actions.
Summary
Legal contingencies require professional judgment to determine whether liabilities should be recognized or merely disclosed.