Consider the following case excerpt from the FASBs discussion materials related to

the existing CON 6 liability definition:

Suppose a hospital has carried out a routine operation during which the patient died. If the

patients death was the result of hospital negligence, it is highly probable the hospital will

have to pay compensation to the patients dependents. The cause of death has not been

established.

. . . Is a present obligation created when:

a. the hospital determines it has been negligent?

b. the executors of the patients estate assert negligence occurred?

c. a court concludes that negligence has occurred?

Analyze this issue...