Omega Company is involved in two unrelated lawsuits, one as the plaintiff and one as the defendant. As a result of the two lawsuits, the company has a contingent asset and a contingent liability. How should Omega record these on its balance sheet?

a. Omega should record the contingent liability and the contingent asset separately on the balance sheet.

b. Omega should record the contingent liability and the contingent asset on the balance sheet by offsetting the liability against the asset.

c. Omega must record the contingent asset if the realization of the asset is probable and the amount can be reasonably estimated, but Omega must not record the contingent liability on the balance sheet.

d. Omega must not record the contingent asset, but Omega must record the contingent liability on the balance sheet if the liability is probable and the amount can be reasonably estimated.