Gain Contingency On December 31, 2007 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, 2007 year end financial statements were issued March 2, 2008 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 2007 financial statements of Braino Tech called for by FASB Statement No 5 concerning the described circumstances

Question: Gain Contingency On December 31, 2007 Braino Tech., Inc. learned that its competitor had introduced a product making use of an accessory over which Braino

Gain Contingency On December 31, 2007 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, 2007 year-end were issued March 2, 2008. 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 2007 of Braino Tech. called for by FASB Statement No. 5 concerning the described circumstances.

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