4. A building owned by ABC was destroyed by fire. ABC lodged an insurance claim for the value of the building, plant, and an amount equal to one year's net profit. During the year there were a number of meetings with the representatives of the insurance company. Finally, before year- end, it was decided that ABC would receive compensation for 80% of its claim.ABC received a letter that the settlement check for that amount had been mailed, but it was not received before year-end. How should ABC. treat this in its financial statements? O wait until next year when the settlement check is actually received and not recognize or disclose this receivable at all since at year-end it is a contingent asset. Because the settlement of the claim was conveyed by a letter from the insurance company that also stated that the settlement check was in the mail for 80% of the claim, record 100% of the claim as a receivable at year-end as it is virtually certain that the contingent asset will be received, and adjust the 20% next year when the settlement check is actually received. Disclose the contingent asset in the footnotes. Because the settlement of the claim was conveyed by a letter from the insurance company that also stated that the settlement check was in the mail for 80% of the claim, record 80% of the claim as a receivable as it is virtually certain that the contingent asset will be received. 4. Onerous contracts indicate a need to O Test for impairment Consider making a contingent asset. Consider making a contingent liability O None of the above