Question 7: Contingencies Please answer the following questions using the information below taken from the footnotes to a firm's 2021 financial statements (US firm following US GAAP): Note 11: Contingencies We are also subject to other government inquiries and investigations relating to our business activities and disclosure practices. For example, beginning in September 2021, we became subject to government investigations and requests relating to a former employee's allegations and release of internal company documents concerning, among other things, our algorithms, advertising and user metrics, and content enforcement practices, as well as misinformation and other undesirable activity on our platform, and user well-being. Beginning on October 27, 2021, multiple putative class actions were filed in federal court in the United States against us and certain of our directors and officers alleging violations of securities laws in connection with the same matters. We believe these lawsuits are without merit, and we are vigorously defending them. A. Given the information provided above, how do these lawsuits affect the firm's 2021 net income? Briefly explain the accounting treatment of such a contingency.

Question 7: Contingencies Please answer the following questions using the information below taken from the footnotes to a firm's 2021 financial statements (US firm following US GAAP): Note 11: Contingencies We are also subject to other government inquiries and investigations relating to our business activities and disclosure practices. For example, beginning in September 2021, we became subject to government investigations and requests relating to a former employee's allegations and release of internal company documents concerning, among other things, our algorithms, advertising and user metrics, and content enforcement practices, as well as misinformation and other undesirable activity on our platform, and user well-being. Beginning on October 27, 2021, multiple putative class actions were filed in federal court in the United States against us and certain of our directors and officers alleging violations of securities laws in connection with the same matters. We believe these lawsuits are without merit, and we are vigorously defending them. A. Given the information provided above, how do these lawsuits affect the firm's 2021 net income? Briefly explain the accounting treatment of such a contingency.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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