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QUESTION 1) (20 pts) Lawsuits are one type of contingent loss, where the loss is contingent upon an adverse settlementorverdict in the case. For instance,
QUESTION 1) (20 pts) Lawsuits are one type of contingent loss, where the loss is contingent upon an adverse settlementorverdict in the case. For instance, Hospitals are facing lawsuits from several patients due to surgical malpractices. The litigation loss contingency should be accrued if a loss is probable and can be estimated. Probable and estimable are difficult concepts that offer managers a fair degree of discretion. Required: Provide at least one reason why managers might resist showing contingent liability for the lawsuits. (50 words)
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