ACC541 ACC/541 Learning Team Response to Client Request II - 19464

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Price: $15.00
  • From: Business,
  • Posted on: Tue 23 Jul, 2013
  • Request id: None
  • Purchased: 1 time(s)
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Request Description

Your client is being sued!  The client’s attorney has informed you the client could lose the lawsuit.  The client, meanwhile, has asked you to describe what would happen in their financial statements in they lose the lawsuit.  They are concern about the mortgage on their office building and a patent.  They have been discussing the mortgage with their lender.  The client wants you to provide specific information related to the mortgage.  It includes: (1) if the debt is forgiven; (2) the mortgage is rewritten (restructured), (3), if their mortgage will be written if they file Chapter 11 bankruptcy.  Address each individually

 

The lawsuit also involves a patent held by the company.  The company has acquired a hedge contract against the impairment of the patent.  Aside from the recovery of the hedge, the client also wants to know how the impairment of the patent will affect the financial statements in the event of losing a lawsuit.

 

Conduct research in the ASC to answer your client’s questions.  You may also supplement the ASC with other qualifying source information.  Then, as a team, write a 700- to 1,050- word “memo” that is brief but details the issues.  Include the following in your memo:

                                                          

  • Reporting requirements/disclosures for contingencies and describe what would happen to the financial statements if the client loses the lawsuit.

 

  • Discuss if the client’s debt is forgiven, if the mortgage is rewritten, or if their mortgage will be written if they file Chapter 11 bankruptcy.  How will the reporting on the financial statement be determined?

 

  • Describe how the impairment of the patent will affect the financial statements in the event of losing a lawsuit.  Discuss the impact of the hedge against the impairment.
Solution Description

MEMORANDUM

TO: Company ABC

FROM: Name

Attachments
ACC541Week4Paper.docx
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