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Pine Systems' revenues for 2018 totaled $27.1 million. As with most companies, Pine is a defendant in lawsuits related to its products. Note 14 of the Pine annual report for 2018 reported thefollowing: O(click the icon to view the note.) Read the requirements. Requirement 1. Suppose Pine's lawyers believe that a significant legal judgment against the company is reasonably possible. How should Pine report this situation in its financial statements? First, let's decide how the lawsuit should be reported in the financial statements. The lawsuit should 1 Requirements 1. Suppose Pine's lawyers believe that a significant legal judgment against the company is reasonably possible. How should Pine report this situation in its financial statements? 2. Suppose Pine's lawyers believe it is probable that a $2.1 million judgment will be rendered against the company. In general terms, how would this situation be reported in Pine's financial statements (using U.S. GAAP)? Print Done