Most financial statement readers believe that property, plant and equipment, and intangible assets (most notably goodwill) are the most misstated assets on the balance sheet. Why?

Certain liabilities, such as contingencies, pose special challenges to the accountant. What guidance does GAAP provide to help answer these questions:

a. Should we record the liability on the books?

b. What is the amount of the liability that should be recorded?

c. When should we record the liability, if ever?