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Corporation A has a court case that began on June 30, 2019, and on February 15, 2020, it is established that it has to pay
Corporation A has a court case that began on June 30, 2019, and on February 15, 2020, it is established that it has to pay $2,000,000 for damages caused. The fiscal year ends on December 31, 2020, and the financial statements are issued on February 28, 2021. How should this event of February 15, 2020, be recognized in the 2020 financial statements?
A. Through a note in the financial statements. B. Not recognized until 2021. C. Divide the liability 50% and 50% between 2019 and 2020. D. Record a liability of $2,000,000.
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