PART III You could probably use some help at this point. So you call the audit partner, and discuss the situation with him. The audit partner stresses to you that LDRF is one of the audit firm's large clients. He further states that he concurs with the position of the LDRF Executive Director that the $5,000,000 should be recognized in the following fiscal year. He tells you that you do not recognize a gain contingency until the amount to be received is known. The residual beneficiary of an estate usually does not know how much will be received until the estate debts are paid and any contesting litigation is settled by the court. In this case, he says, although the will had been settled judicially on June 28, 2022, LDRF did not know how much it would receive until July 9, 2022, which is the date LDRF got the estate attorney's letter and the $5,000,000 check. Case Questions - Part III (See the Appendix for the FASB Accounting Standards Codification) 7. According to the accounting standards, what is a gain contingency? 8. According to the accounting standards, what is the accounting treatment of a gain contingency? In other words, when should a gain contingency be disclosed and/or recorded? 9. Was the audit partner correct in his explanation of when to record the $5,000,000? Briefly explain. 10. According to the accounting standards that are specific to NFPs, how should LDRF report the $5,000,000 in its financial statements? Briefly explain. 11. What are some possible reasons that the audit partner concurs with the LDRF Executive Director?