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

2. 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

3. Question 1
What is a contingent liability?

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

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

6. 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?

7. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Dr. Wendy Tietz at