Aviation Systems is involved in a $10 million lawsuit filed against one of its suppliers, Electronic Innovators. The litigation is in final appeal, and legal counsel advises that it is probable that Aviation Systems will win the lawsuit and be awarded somewhere between $6 million and $10 million. Which of the following statement is true?

• Gain contingencies are not recorded
• A gain must be recorded for $10 million and an asset must be recorded for $6 million
• A gain and an asset must be recorded for $6 million
• A gain must be recorded for $6 million and an asset must be recorded for $10 million
• A gain and an asset must be recorded for $10 million

Help on this question would be much appreciated!