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Governments should report an estimated loss from a claim or judgment as an expense and as...

Governments should report an estimated loss from a claim or judgment as an expense and as a liability in the government-wide financial statements if a claim appears reasonable.

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True
False
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Answer #1

Statement Number 10 of the Government Accounting Standard Board states that state and local government entities other than public entity are required to report an estimated loss from a claim or judgment as an expense and as a liability in the government-wide financial statements if a claim appears reasonable if two conditions are met-

1. The amount of loss can be reasonably estimated.

2. Before the Financial statements are issued the information provided indicates that it is probable that asset has been impaired or liability has been incurred at the date of financial statements.

Hence the statement is True

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