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Pharma Inc

Assignment Details

A contingency can result in a gain or a loss. Loss contingencies must meet certain criteria based on the likelihood that the contingency will occur. According to ASC 450, the possibilities of occurrence are as follows:

  • Remote
  • Possible
  • Probable

Pharma, Inc., is a U.S. publicly traded company that manufactures vaccines for viruses and other diseases. On March 15, 2021, Pharma released a vaccine for COVID-19 after the vaccine was successful in human trials. Six months earlier, Rapid, Inc., had been the first entity to release a vaccine for COVID-19. Rapid’s management and Board of Directors were angry when Pharma released its vaccine because Rapid stated that the vaccine released by Pharma was not substantially different from the vaccine released by Rapid. Rapid had obtained a patent on its vaccine prior to the public release.

As soon as Pharma’s vaccine was publicly released, Rapid sued Pharma for patent infringement. After careful review, Pharma’s legal team was concerned and advised Pharma’s executive team that it was probable that Pharma would lose the case. The organization’s legal team advised Pharma that it could lose between $4 and $6 million. The case was in litigation on December 31, 2021, which is the end of Pharma’s fiscal year.

Assume that you are the chief financial officer (CFO) of Pharma. The chief executive officer (CEO) asked you to draft a memo to the Board of Directors addressing the potential financial impact on the 2021 financial statements. In addition, your memo should include information that will be included in the 2021 annual report note disclosure.

Prepare a 1-page memo using Microsoft Word addressing the financial impact on the 2021 financial statements. Include the information that needs to be in the note disclosure. Assume that the risk of loss is probable for Pharma.

Disclosures generally include the nature of the contingency, accrual related to the probable contingency or accounts impacted, and a range of potential dollar loss related to the contingency.

Submitting your assignment in APA format means, at a minimum, that you will need the following:

  • Title page: Remember the running head. The title should be in all capitals.
  • Length: 1 page minimum
  • Abstract: This is a summary of your paper, not an introduction. Begin writing in third person.
  • Body: This begins on the page following the title page and abstract page and must be double-spaced (be careful not to triple- or quadruple-space between paragraphs). The typeface should be 12-pt. Times Roman or 12-pt. Courier in regular black type. Do not use color, bold type, or italics, except as required for APA-level headings and references. The deliverable length of the body of your paper for this assignment is 1 page. In-body academic citations to support your decisions and analysis are required. A variety of academic sources is encouraged.
  • Reference page: References that align with your in-body academic sources are listed on the final page of your paper. The references must be in APA format using appropriate spacing, hanging indent, italics, and uppercase and lowercase usage as appropriate for the type of resource used. Remember, the Reference page is not a bibliography but a further listing of the abbreviated in-body citations used in the paper. Every referenced item must have a corresponding in-body citation.

Please submit your assignment.

 

Grading Rubric: Maximum 100 Points

Grading Criteria

Points

Deliverable requirements addressed; understanding of material and presenter’s message and intent are clear 

40 points

Followed assignment guidelines and criteria

20 pts

Yes/Complete

Mostly

Not at all

Overall quality

20 pts

Excellent

Satisfactory

Needs Improvement

Scholarly research that supports the writer’s position is properly acknowledged and cited, and direct quotations do not exceed 10% of the word count of the body of the assignment deliverable 

25 points

Title page, table of contents, tables, exhibits, appendices or reference page included

12.5 pts

Yes

Partially

Not at all

Content is original with less than 35% match

12.5 pts

Yes

36–50%

51% or over

Critical thinking: Position is well-justified; logical flow; examples  

10 points

Position is justified with examples

5 pts

Excellent

Satisfactory

Needs Improvement

Presentation flows logically

5 pts

Excellent

Satisfactory

Needs Improvement

Structure: Includes introduction and conclusion, proper paragraph formatting, and reads as a polished academic paper or professional presentation, as appropriate for the required assignment deliverable

7.5 points

Includes introduction and conclusion

2.5 pts

Excellent

Satisfactory

Needs Improvement

Paragraphs are formatted properly

2.5 pts

Excellent

Satisfactory

Needs Improvement

Reads as polished academic paper or presentation

2.5 pts

Excellent

Satisfactory

Needs Improvement

Mechanical: No spelling, grammatical, or punctuation errors 

10 points

Spelling and grammar are accurate

5 pts

Yes

Partially

Not at all

Punctuation is accurate

5 pts

Yes

Partially

Not at all

APA: Deliverable is cited properly according to the APA Publication Manual 

7.5 points

References are cited in accordance with APA formatting

5 pts

Yes

Partially

Not at all

Reference page is included

2.5 pts

Yes

Partially

Not at all

 

For assistance with your assignment, please use your text, Web resources, and all course materials.

 

Your assignment will be graded in accordance with the following criteria. View the grading rubric.

 

Assignment Reminders:

 

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Assignment Outline