Barone, Inc. is involved with several situations that possibly involve contingencies. Each is described below. Barone's fiscal year ends December $31,$ and the $2022$ financial statements are issued on March $1,2023$ and follow US GAAP.

$$At March $1,2023,$ the EPA is in the process of investigating possible chemical leaks at two of Barone's facilities that allegedly occurred in $2022,$ but has not proposed a deficiency assessment. Management feels an assessment is reasonably possible, and if an assessment is made an unfavorable settlement of an estimated $$8$ million is probable.

$$Barone is the plaintiff in a $$33$ million lawsuit filed against Faze Corp. for damages due to lost profits from rejected contracts and for unpaid receivables. The case is in final appeal and legal counsel advises that it is virtually certain that Barone will prevail and be awarded $$25$ million.

$$Barone is involved in a lawsuit resulting from a dispute with a customer. On January $5,2023,$ judgment was rendered against Barone in the amount of $$16$ million plus interest, a total of $$18$ million. Barone plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company.

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