Miley Company is involved in a lawsuit brought by former employees. The employees are suing for a recovery of $350,000 for injury at work. The legal advisor is quite pessimistic about the lawsuit and believes that it is probable (more likely than not) that the company will lose the litigation and pay the full amount of the claim. Discuss the proper accounting treatment, including any required disclosure, for Miley Company regarding the above ongoing litigation (no journal entry is required).