Assume the entity had made an insurance claim which was still in negotiation at year end. Subsequent to year-end and prior to the issuance of the financial statements, the claim is settled. Which of the following is true? 1 correct response

This event only needs to be disclosed in the notes to the financial statements.

The claim should not be included in the notes or the amounts of the financial statements as it does not relate to the year under audit.

This is a Type 2 subsequent event.

The amount of the claim should be included in the financial statements.