On March 2015, Agency A is taking legal action against its competitor for patent infringement relating to a patent that had been granted to the agency on one of its products. The outcome of the case is uncertain. However, it is probable that the court will order the competitor to pay damages to the entity. Use facts given in No. 1, but assumes that on June 2015 the Chief Legal Counsel of Agency A informs the management that it is now virtually certain that the court will order the competitor to pay damages to the entity. State whether a contingent liability or contingent asset exists. Explain your answers by stating the criteria of your answers below.
On March 2015, Agency A is taking legal action against its competitor for patent infringement relating to a patent that had been granted to the agency on one of its products. The outcome of the case is uncertain. However, it is probable that the court will order the competitor to pay damages to the entity. Use facts given in No. 1, but assumes that on June 2015 the Chief Legal Counsel of Agency A informs the management that it is now virtually certain that the court will order the competitor to pay damages to the entity. State whether a contingent liability or contingent asset exists. Explain your answers by stating the criteria of your answers below.
Chapter5: Ethical Responsibilities Of Independent Auditors
Section5.4: Ipoc International Growth Fund, Ltd.
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- On March 2015, Agency A is taking legal action against its competitor for patent infringement relating to a patent that had been granted to the agency on one of its products. The outcome of the case is uncertain. However, it is probable that the court will order the competitor to pay damages to the entity.
- Use facts given in No. 1, but assumes that on June 2015 the Chief Legal Counsel of Agency A informs the management that it is now virtually certain that the court will order the competitor to pay damages to the entity.
- State whether a
contingent liability or contingent asset exists. - Explain your answers by stating the criteria of your answers below.
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