Each scenario requires a full written disclosure:

1) Slap Happy Brewing Company has purchased two new delivery trucks for $25,000 each. Because the business is growing, you have decided to adjust their capitalization limit from $10,000 to $20,000. In addition, because they have two shiny new delivery trucks, they have decided to retire their old, beat up truck.

2) Baker Bros. Construction has entered into a $100 million contract. They will be paid in four specified milestones of $25 million. Estimated construction costs are $50 million. If construction is completed after a specified date, the last milestone payment is reduced by $10 million, but if construction is completed before a specified date the last milestone payment is increased $10 million. You are working on the financial statements for this period. The Baker Bros. are 80% completed with the project and have just reached the third milestone. Because they are well ahead of schedule, you consider it probable that they will receive the $10 million bonus. However, the company is not unconditionally entitled to this amount. There is always a possibility that problems with the project could occur and even cause the Baker Bros. to be late.