Question
Big Co. has international operations in numerous foreign jurisdictions some of which have recently become politically unstable with foreign governments expropriating (i.e. seizing) the assets
Big Co. has international operations in numerous foreign jurisdictions some of which have recently become politically unstable with foreign governments expropriating (i.e. seizing) the assets of U.S. owned companies which are physically operating in the foreign jurisdiction. Currently Big has risk for future asset expropriation in 4 cities (table 1 below)
Additionally, Big is the plaintif in a defamation lawsuit filed against a competitor. Bigs legal team feels that the companys case is strong with a high liklihood of the jury deciding in Bigs favor. If the legal team's projections are accurate, Big could receive damages ranging anywhere from $600,000 to $1,500,000. Big uses US GAAP and has made no previous entries related to the above described situations.
What dollar amount of loss should Big accrue as a result of the above contingencies?
A. | $3,000,000 | |
B. | $8,125,000 | |
C. | None of the answer choices provided are correct. | |
D. | $6,000,000 | |
E. | $7,900,000 |
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