How would 3M account for the contingent liability arising from an environmental lawsuit? Original blog post link on January 26, 2018

3M is facing a lawsuit 3M is based in Minnesota State of Minnesota is suing 3M for $5 billion Alleges that 3M dumped harmful chemicals in landfills from 1940s through 1970s Now those chemicals are allegedly in the groundwater 3M attorneys have responded that the chemicals have not been proven to be harmful to humans

Question 1 What is a contingent liability?

Question 2 What are the three potential accounting treatments for a contingent liability?

Question 3 In your opinion, how do you think 3M will treat this contingent liability?

Question Recap What is a contingent liability? What are the three potential accounting treatments for a contingent liability? In your opinion, how do you think 3M will treat this contingent liability?

For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at http://accountingintheheadlines.com/ Questions or comments? Dr. Wendy Tietz at wtietz@kent.edu