Suppose Mylan could write an insurance contract whereby it is insured against all penalties resulting from misclassification. Would this affect their need to disclose? Group of answer choices No, because if they are fully covered, investors would find the loss contingency misleading since there is no receivable for the insurance Yes, because they would offset the loss contingency with a receivable which would net to zero No, because purchasing insurance does not relieve the purchaser of its obligation to make payments related to losses that result from risk. Yes, because it is impossible to insure loss contingencies
Suppose Mylan could write an insurance contract whereby it is insured against all penalties resulting from misclassification. Would this affect their need to disclose? Group of answer choices No, because if they are fully covered, investors would find the loss contingency misleading since there is no receivable for the insurance Yes, because they would offset the loss contingency with a receivable which would net to zero No, because purchasing insurance does not relieve the purchaser of its obligation to make payments related to losses that result from risk. Yes, because it is impossible to insure loss contingencies
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose Mylan could write an insurance contract whereby it is insured against all penalties resulting from misclassification. Would this affect their need to disclose? Group of answer choices
No, because if they are fully covered, investors would find the loss contingency misleading since there is no receivable for the insurance
Yes, because they would offset the loss contingency with a receivable which would net to zero
No, because purchasing insurance does not relieve the purchaser of its obligation to make payments related to losses that result from risk.
Yes, because it is impossible to insure loss contingencies
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