Question
American Tobacco Company has a 51% chance of losing the class-action lawsuit filed against them in this period estimated at $20 million. ATC is a
American Tobacco Company has a 51% chance of losing the class-action lawsuit filed against them in this period estimated at $20 million. ATC is a listed US Company with earnings of $45 million this year, total assets valued at $1.1 billion, total liabilities at $750 million, and total equity at $350 million. Their direct competitor, British Tobacco Company, are also listed but uses IFRS to create their financial statements. Their earnings are $60 million this year, total assets are valued at $999 million, total liabilities at $666 million, and total equity at $333 million.
What adjusting entry must be made to be able to directly compare ATC to BTC?
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