use the Accounting Standards Codification (ASC) database to determine the precise reference that represents the authoritative guidance in US GAAP. To illustrate, the support for principles to determine if a transfer of receivables should be accounted for as a sales or as a secured borrowing would be found in ASC section 860-10-40-3.

Your Company is a defendant in a lawsuit that could result in a material loss in the coming year if the plaintiff prevails. You are concerned that you may have to accrue a loss and a liability for this contingent result of the lawsuit. Identify the authoritative guidance that indicates the conditions under which the loss and liability will be accrued before the lawsuit is resolved.