H. J. Heinz Company is a worldwide provider of processed food products and services. In the company's 1987 annual report, the footnotes to the financial statements included the following item:

\section*{8. LEGAL MATTERS}

Star-Kist Foods, Inc., a wholly-owned subsidiary of the company, and two other tuna canners, Ralston-Purina, Inc. and Castle \& Cooke, Inc., are defendants in a suit brought. by owners of 21 tuna fishing vessels which was originally filed in February, 1985 in the United States District Court for the Southern District of California in San Diego. The complaint alleges that the defendants have engaged in price fixing and other violations of federal antitrust laws in connection with the purchase of raw tuna from the plaintiffs. Plaintiffs have also asserted in the same litigation, state contract, tort and punitive damage claims. Star-Kist Foods has vigorously defended against this action and in November, 1985, filed its own antitrust and state law counterclaims against the plaintiffs. Most of the plaintiffs have settled with the defendants and settlement negotiations are in progress with the remaining plaintiffs. Management is of the opinion, based on facts presently available, that this action will finally be settled for an amount approximating the amount which has been reserved in the company's 1987 consolidated financial statements. This amount was not material to 1987 results.

Comment on the reasons why the management of H. J. Heinz Company decided to include the above statements among the footnotes to the company's financial statements. Since the legal action against the company had not been resolved when the financial statements were issued, what reasons would have led the company to accrue an expense in the 1987 income statement? Under what circumstances might the company have included a footnote such as the above but avoided reporting an expense on the 1987 income statement?