Disclosure of loss contingencies

October 2010
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Point of view: Disclosure of loss contingencies

At a glance

If the proposed accounting standard is finalized, could it impact the outcome of litigation?

Highlights

  • The U.S. legal system provides certain protections to lawsuit defendants. The additional disclosures being proposed must be balanced against possible prejudicial impacts that could unfairly and adversely affect a company and its investors.
  • Addressing these concerns before finalizing a new standard may take significant time and effort. Even if prejudicial and other concerns can be addressed, we believe any improvement in reporting over the current standard would be marginal.
  • Given the already challenging standard-setting agenda, further work on this proposal should be deferred, pending completion of more important new standards.