How would they report this contingent liability

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Reference no: EM131202314

A company is being sued for $10,000,000 but the lawyers think it is a frivolous lawsuit and that there is a remote chance that the company will lose. How would they report this contingent liability?

As a disclosure in the footnotes to the financial statements

As a long term liability because the lawsuit is not likely to be settled for years

They do not have to report anything

On the face of the income statement

As a subsequent event

Reference no: EM131202314

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