8. CPA-00733 Ace Co. settled litigation on February 1, 2002 for an event that occurred during 2001. An estimated liability was determined as of December 31, 2001. This estimate was significantly less than the final settlement. The transaction is considered to be material. The financial statements for year-end 2001 have not been issued. How should the settlement be reported in Ace's year-end 2001 financial statements? a. Disclosure only of the settlement. b. Only an accrual of the settlement. c. Neither a disclosure nor an accrual. d. Both a disclosure and an accrual