On December 31, 2010, Braino Tech., Inc., learned that its competitor had introduced a product making use

Question:

On December 31, 2010, Braino Tech., Inc., learned that its competitor had introduced a product making use of an accessory over which Braino Tech. has exclusive patent rights. Braino Tech. planned to file suit and in all likelihood, its attorneys felt, Braino should recover at least $500,000. Braino Tech.'s December 31, 2010 year-end were issued March 2, 2011. At that date Braino Tech. still planned to file suit, even though it had not yet done so.

Required
Discuss the accounting treatment in regard to the 2010 of Braino Tech. called for by concerning the described circumstances.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...