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Nicole, Inc. uses IFRS for its external financial reporting. During 2011, an employee of the company was injured in the factory. Discussions with corporate attorneys resulted in a determinatin that the company would be required to pay between $1,500,000 and $3,000,000 to settle the injury claim. Nicole, Inc. accrued a contingent liability on December 31, 2011 for $1,500,000. On February 4, 2013, Nicole, Inc. settled the lawsuit for $300,000. What amount of loss should be reported on the income statement for the year ended December 31, 2012 for Nicle, Inc. related to this lawsuit?

A) $300,000
B) $1,800,000
C) $1,500,000
D) No extra loss will be recorded in 2012, the remaining loss will be recorded in 2013.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9416919

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