Question
SkillSoft is a leading provider of content resources and complementary technologies for integrated enterprise learning. The companys fiscal year ends December 31, 2015, and it
SkillSoft is a leading provider of content resources and complementary technologies for integrated enterprise learning. The companys fiscal year ends December 31, 2015, and it plans to file its financial statements with the SEC on March, 15, 2016. On March 10, the company issued the following press release ( in part):
NASHUA, N. H., March 10 / PRNewswire- FirstCall/ SkillSoft PLC ( Nasdaq: SKIL), . . . has agreed . . . to settle a lawsuit filed against it and certain of its former and current officers and directors in late 2015 related to the 2013 securities class action lawsuit. This lawsuit included substantially the same claims as those set forth in the previously settled 2013 securities class action lawsuit. Under the terms of the settlement, SkillSoft will pay a total of $ 1.79 million to the plaintiffs prior to March 15, 2016.
Required: | |||||||||||||||||||||||||
1. | From an accounting perspective, how should SkillSoft have treated the settlement? | ||||||||||||||||||||||||
2. | Relying on the information provided by the press release, re- create the journal entry SkillSoft recorded for the settlement. | ||||||||||||||||||||||||
3. | Suppose the settlement had occured after march 15th. How should SkillSoft handled the situation?
Treatment on March 10th -
& Journal entry
Treatment if settlement had occurred after March 15th |
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