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Discuss how the events should be recorded

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Question - Stevenson Switching Ltd. (SSL) is a manufacturer of digital switching equipment and systems. The company has total assets of approximately $784 million. Each of the following events occurred after the end of SSL's 2020 fiscal year, but before the statements have been finalized:

a. SSL finalized an agreement to sell a major production facility to Cascade Cable Corporation for approximately $42 million cash. The sale includes buildings of approximately one million square feet, fixtures, equipment, and 63 acres of land. The property has an amortized cost of $28 million on SSL's draft 2020 SFP.

b. The CEO of Bandola Corporation, SSL's major competitor, accused senior SSL executive of improperly accessing confidential information via an employee-only portal on Bandola's website using that information for competitive advantage. Bandola said that the company will file a lawsuit to recover $76 million in damages. SSL vehemently denies the allegation.

c. SSL sells a patent on January 3, 2021 for $176,000, on SSL's draft SFP the patent has a carrying amount of $190,000.

Required - Discuss how the above events should be recorded in the 2020 financial statements.

Reference no: EM132693479

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