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Settlement account is an account that is used in Balance of Payment (BOP) accounting to keep track of central banks' reserve asset dealings with one other. The official settlement A/c keeps track of transactions that involve foreign exchange reserves, bank deposits, special drawing rights (SDRs) and gold.

Under settlement date accounting, a transaction is recorded in the general ledger when it is "fulfilled" or "settled." This is contrasted with trade date accounting, where transactions are recorded in the general ledger at the initiation date rather than at completion.

In the case of business litigation in which one party sues another for breach of contract and seeks monetary damages, for instance, account settlement would occur if the parties decide to resolve their dispute before going to court.

The disclosure should include the nature of the contingency and an estimate of the possible liability, an estimate of the range of the possible liability, or a statement that such an estimate cannot be made. When disclosing that an estimate cannot be made, the claimed amount should be disclosed.

Assuming that the loss contingency is “probable” and can be reasonably estimated, then a journal entry should be recorded to accrue the liability. The journal entry would be to debit legal expense and credit to record the legal liability.

What is a Lawsuit Payable? A lawsuit payable is a general ledger account that contains the amount owed to the opposing party in a lawsuit. Liabilities are only recorded in this account if the amount to be paid is both probable and can be estimated.

Gain contingencies should be disclosed in the notes to the financial statements if it not misleading. Otherwise, potential gains should only be recorded to the financial statements when the activity can be recognized (i.e. the company wins the lawsuit).

Read the documents from the company's attorney. ... Write a journal entry to record the estimated loss. ... Enter the dollar amount in the general ledger to increase the "Lawsuit Expense" account. ... Include the "Lawsuit Expense" account on the company's income statement and in the net income calculation.

Settlement account is an account that is used in Balance of Payment (BOP) accounting to keep track of central banks' reserve asset dealings with one other. The official settlement A/c keeps track of transactions that involve foreign exchange reserves, bank deposits, special drawing rights (SDRs) and gold.

Under settlement date accounting, a transaction is recorded in the general ledger when it is "fulfilled" or "settled." This is contrasted with trade date accounting, where transactions are recorded in the general ledger at the initiation date rather than at completion.

In the case of business litigation in which one party sues another for breach of contract and seeks monetary damages, for instance, account settlement would occur if the parties decide to resolve their dispute before going to court.

The disclosure should include the nature of the contingency and an estimate of the possible liability, an estimate of the range of the possible liability, or a statement that such an estimate cannot be made. When disclosing that an estimate cannot be made, the claimed amount should be disclosed.

Assuming that the loss contingency is “probable” and can be reasonably estimated, then a journal entry should be recorded to accrue the liability. The journal entry would be to debit legal expense and credit to record the legal liability.

What is a Lawsuit Payable? A lawsuit payable is a general ledger account that contains the amount owed to the opposing party in a lawsuit. Liabilities are only recorded in this account if the amount to be paid is both probable and can be estimated.

Gain contingencies should be disclosed in the notes to the financial statements if it not misleading. Otherwise, potential gains should only be recorded to the financial statements when the activity can be recognized (i.e. the company wins the lawsuit).

Read the documents from the company's attorney. ... Write a journal entry to record the estimated loss. ... Enter the dollar amount in the general ledger to increase the "Lawsuit Expense" account. ... Include the "Lawsuit Expense" account on the company's income statement and in the net income calculation.