Gain Contingency On December 31, Year 1, Braino Tech Inc. learned that its competitor...
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Gain Contingency On December Year Braino Tech Inc. learned that its competitor had introduced a product using an accessory to which Braino has exclusive patent rights. Braino planned to file suit and its attorneys estimated that Braino should recover at least $ Braino's December Year yearend financial statements were issued March Year At that date, Braino still planned to file suit, even though it had not yet done so Required: Which of the following best describes the action Braino should take and justifies the choice? a Disclosure because there's a lack of sufficient evidence to conclude that the likelihood is probable. b Disclosure because it's conservative. c Accrual because the cause occurred before the date of the financial statements, it's probable, and the amount can be reasonably estimated. d Accrual because it's reasonably possible and reasonably estimable. 
Gain Contingency
On December Year Braino Tech Inc. learned that its competitor had introduced a product using an accessory to which Braino has exclusive patent
rights. Braino planned to file suit and its attorneys estimated that Braino should recover at least $ Braino's December Year yearend
financial statements were issued March Year At that date, Braino still planned to file suit, even though it had not yet done so
Required:
Which of the following best describes the action Braino should take and justifies the choice?
a Disclosure because there's a lack of sufficient evidence to conclude that the likelihood is probable.
b Disclosure because it's conservative.
c Accrual because the cause occurred before the date of the financial statements, it's probable, and the amount can be reasonably estimated.
d Accrual because it's reasonably possible and reasonably estimable.
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