The simple version

A company in a legal fight has to tell you something about it. What it has to tell you depends on how bad things look.

If the loss is likely and the company can put a credible amount on it, the amount goes into the accounts and comes straight off earnings. If the loss is merely possible, the company says so in words and gives no amount at all.

So a case described at length with no dollars attached is not a case the company has dismissed. It is a case that has not yet cleared the bar for a number.

The numbers

• The accounting term is a loss contingency: a possible loss from something that has already happened but is not yet resolved.
• Qualcomm's fiscal 2026 annual report, for the year ended September 27, 2026, states the two tests in one paragraph. A loss is recorded when it is considered probable and the amount can be reasonably estimated.
• Its commitments and contingencies note applies those tests to the matters it describes: it records no accrual at September 27, 2026 for those contingent losses because, in the company's words, the losses, while reasonably possible, are not probable, and it states that any possible amount or range of loss cannot be reasonably estimated at this time.
• The same policy note adds a rule for the awkward middle: where a range can be estimated but no single amount inside it is the best estimate, the company records the minimum estimated liability.
• Qualcomm also notes that in antitrust matters it may not be aware of, and may not be entitled to know, all allegations against it.
• This is the general US rule, not one company's house style. Intel's fiscal 2025 annual report states the same two tests, and adds that significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss.

Probable, possible, and remote

There are three rungs, and only the top one produces a number. At the top, the loss is judged likely enough that an amount belongs in the accounts, and that amount reduces earnings in the period the judgment is made.

On the middle rung, a loss could reasonably go either way. Here the company owes you a description and, if it can manage one, a size or a span. Plenty of disclosures stop at the description.

On the bottom rung the chance is remote, and the company owes you nothing. Those three rungs are set by judgment, inside the company, before anything reaches you.

The actual math on a span with no best guess

Here is an illustration, not a real case. Suppose a company's own counsel says the eventual loss lands somewhere between 40 million and 200 million dollars, and that no single amount inside that span is more credible than any other.

The rule says record the minimum. The accounts take a 40 million dollar hit, and 40 million is the number that flows into earnings.

The other 160 million is an amount the company itself has told you is possible and has not recorded. It sits in the words of the disclosure rather than in the arithmetic of the accounts.

What this means

Read the legal note in an annual report for what it does not quantify, not just for what it does. The recorded amount is a floor built by a rule, not a forecast of the eventual bill.

It also means two companies facing comparable trouble can present very different figures, because the rungs turn on internal judgment about likelihood and estimability. The accounting is consistent; the inputs are not observable from outside.

What this is NOT

This article explains how US accounting rules decide when a possible loss gets a dollar amount. It is not an assessment of any specific lawsuit, any company's exposure, or anyone's chance of winning.

It is not legal advice and it is not a recommendation to buy or sell anything. Qualcomm appears here because its annual report states the rule plainly, not as a pick or a pan.

Sources

• QUALCOMM Incorporated, Form 10-K for the fiscal year ended September 27, 2026, filed November 4, 2026 (accession 0000804328-26-000128), Note on significant accounting policies, legal and regulatory proceedings.
• QUALCOMM Incorporated, same filing, Commitments and Contingencies note, for the absence of an accrual at September 27, 2026 and the statement that any possible amount or range of loss cannot be reasonably estimated.
• Intel Corporation, Form 10-K for the fiscal year ended December 27, 2025, filed January 23, 2026 (accession 0000050863-26-000011), accounting policies, loss contingencies.
• US Securities and Exchange Commission, EDGAR full-text filing archive, read November 6, 2026.