L'Oréal reports the following income statement accounts for the year ended December 31, 2014 (euros in millions)

L'Oréal reports the following income statement accounts for the year ended December 31, 2014 (euros in millions). Prepare the income statement for this company for the year ended December 31, 2014, following usual IFRS practices.

Aviation Systems is involved in a $10 million lawsuit filed against one of its suppliers

Aviation Systems is involved in a $10 million lawsuit filed against one of its suppliers, Electronic Innovators. The litigation is in final appeal, and legal counsel advises that it is probable that Aviation Systems will win the lawsuit and be awarded somewhere between $6 and $10 million.

Which of the following statement is true?

A gain and an asset must be recorded for $10 million.

A gain and an asset must be recorded for $6 million.

A gain must be recorded for $6 million and an asset must be recorded for $10 million.

Gain contingencies are not recorded.

A gain must be recorded for $10 million and an asset must be recorded for $6 million.

Aviation Systems has a contingent gain that is probable and reasonably estimable, within a range between $6 and $10 million. Contingent gains are not recorded until the gain is certain. Though firms do not record contingent gains in the accounts, they sometimes disclose them in the notes to the financial statements.


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