Principle Company is suing a competitor for $400,000. Principles lawyer believes that Principle will probably win and receive all $400,000. Which of the following is true of reporting this contingent gain under U.S. GAAP?

Select one:

a. The gain should be disclosed in the notes to the financial statements.

b. The gain should not be reported.

c. The gain should be reported in the statement of cash flows.

d. The gain should be reported on the income statement.

e. The gain should be reported on the balance sheet.