Mirage Enterprises is suing a competitor for copyright infringement. The company believes that it is probable that it will win the case and be paid $$100,000.$ How should this $$100,000$ be reported?

Multiple Choice

$$ It should not be reported in the current period. Wait until it is realized.

$$ Record the potential gain of $$100,000$ in the current period and include a disclosure note in the financial statements.

It should be allocated over the life of the associate intellectual property and depreciated or amortized over the remaining life to match the revenues in the period per the matching principle.