Exhibit I—Excerpts From Financial Accounting Standards

Excerpts From FASB ASC 450 437 AU Section 337B Exhibit I—Excerpts From Financial Accounting Standards Board Accounting Standards Codification 450, Contingencies Source: SAS No. 12. March, 1975. The following excerpts are reprinted with the permission of the Financial Accounting Standards Board (FASB). Overall Overview and Background General 450-10-05-4. The Contingencies Topic establishes standards of financial ac- counting and reporting for loss contingencies and gain contingencies, including standards for disclosures. 450-10-05-5. Resolution of the uncertainty may confirm any of the follow- ing: a. The acquisition of an asset b. The reduction of a liability c. The loss or impairment of an asset d. The incurrence of a liability. 450-10-05-6. Not all uncertainties inherent in the accounting process give 1 rise to

contingencies. Estimates are required in financial statements for many ongoing and recurring activities of an entity. The mere fact that an estimate is involved does not of itself constitute the type of uncertainty referred to in 2 3 the definition of a loss contingency or a gain contingency. Several examples of situations that are not contingencies are included in Section 450-10-55. 1 According to the Financial Accounting Standards Board (FASB) Accounting Standards Cod- ification (ASC) glossary, a contingency is "an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss (loss contingency) to an entity that will ultimately be resolved when one or more future events occur or fail to occur." 2 According to the FASB ASC glossary, a gain contingency is "an existing condition, situation, or set of circumstances involving uncertainty as to possible gain to an entity that will ultimately be resolved when one or more future events occur or fail to occur." 3 According to the FASB ASC glossary, a loss contingency is "an existing condition, situation, or set of circumstances involving uncertainty as to possible loss to an entity that will ultimately be resolved when one or more future events occur or fail to occur. The term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses." AU §337B 438 The Standards of Field Work Loss Contingencies Recognition General General Rule 450-20-25-1. When a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence 4 5 of a liability can range from probable to remote. As indicated in the definition of contingency the term loss is used for convenience to include many charges against income that are commonly referred to as expenses and others that are commonly referred to as losses. The Contingencies Topic uses the terms 6 probable, reasonably possible, and remote to identify three areas within that range. 450-20-25-2. An estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met: a. Information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. Date of...

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