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5. Does the company transfer property between taxing jurisdictions that could be subject to additional use taxes?

Once it has been determined that a contingency exists and that it must be disclosed, the contingency must be estimated. FASB Interpretation No. 14 (FIN 14) provides an interpretation of FAS 5 on how to provide for a reasonable estimation of the amount of a loss. But although guidance is provided on pending litigations and the use of ranges to estimate the liability, FASB does not provide substantial guidance on methods that may be used to calculate the contingency.

Layne Albert
Managing Director, Houston
713-221-3910
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