MICROSOFT CORPORATION IS THE DEFENDANT IN NUMEROUS LAWSUITS CLAIMING UNFAIR TRADE PRACTICES. MICROSOFT HAS STRONG INCENTIVES
NOT TO DISLOSE THESE CONTINGENT LIABILITIES; HOWEVER, IFRS AND ASPE GENERALLY REQUIRE THAT COMPANIES DISCLOSE THIER CONTINGENT LIABILITIES IN
THE NOTES TO THIER FINANCIAL STATEMENTS.
REQUIREMENT
1. WHY WOULD A COMPANY PREFER NOT TO DISCLOSE ITS CONTINGENT LIABILITIES?
2. DESCRIBE HOW A BANK COULD BE HARMED IF A COMPANY SEEKING A LOAN DID NOT DISCLOSE ITS CONTINGENT LIABILITIES.
3. WHAT IS THE ETHICAL TIGHTROPE THAT COMPANIES MUST WALK WHEN THEY REPORT THIER CONTINGENT LIABILITIES?
