Brief Respite, Inc. sold underwear made from a fabric that gave many of its customers a serious rash. The customers are using the company is a class action suit, Although the is not yet in, Brief Respite's think it is probable that the case will cost the company $2 million, The company should. only explain the situation in the notes to the financial statements record a liability and gain for $2 million record a liability and a loss for $2 million not include this information in its annual report