Trans Planetary Transport has been negotiating with its employees union for a new contract during 2020. However, these negotiations have been proving to be very tough. So far there has not been much progress and management is pessimistic about a quick resolution. The company is concerned that during 2021 the company's employees could decide to go on strike. In fact, the negotiating lawyers consider it very likely. At this point it is difficult to make an accurate assessment of the economic consequences of the potential strike. The company's accountants have provided some very basic estimates that such losses in 2021 could amount to between $20 million and $92 million. This has made the Board of Directors most concerned and so it has asked the Controller to record and report a contingent loss of $100 million in the financial statements for 2020. In your opinion, the company for 2020 should

a.

make no disclosure in the financial statements of 2020.

b.

provide only the information about the strike in sufficient detail as well as the progress on the negotiations, in a footnote disclosure.

c.

should accrue a contingent loss of $20 M and report the balance of $72 million in a footnote disclosure.

d.

should accrue a contingent loss of $92 M and report the maximum possible loss of $100 M in a footnote disclosure.

e.

None of the above answers.