Question

How should a loss contingency that is reasonably possible and for which the amount can be reasonably estimated be reported

Answer 1

as a footnote in financial statements or on the balance sheet

Step-by-step explanation:

A loss contingency can be defined as the situation or occurrence in which there is uncertainty about an entity but that will be resolved when a/some future situation occurs or not.

Simply put, a loss contingency can be said to be loss of an entity that can be resolved later in future by the occurrence or not of an event.

When a loss can be reasonably estimated as seen from the question, it should be written as a footnote on a financial statement or on a balance sheet.

cheers.