Question: Evans & Sons, Inc., received notification from a local attorney that the company was being sued for $5,000,000 for patent infringement. A review of the

Evans & Sons, Inc., received notification from a local attorney that the company was being sued for $5,000,000 for patent infringement. A review of the situation by the company’s CEO led to the conclusion that Evans & Sons had indeed infringed upon the other company’s patented product. Nonetheless, the CEO thought the amount of $5,000,000 was excessive and intended to litigate the issue. How should the lawsuit be reported in Evans & Sons’ annual report?

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