which answer is right for this question?

Varal Co. is a retailer of furniture with annual sales revenue of $2,500,000. When Varal Co. prepared its financial statements, it ignored the fact that a former employee was suing them for $2 million in an unfair dismissal case. This is Select one: reasonable, as putting the expense in the financial statements would be an admission of liability; and anyway, the owner thought the company would win the case reasonable, as unfair dismissal cases are often frivolous unreasonable, because of the historic cost concept unreasonable, because of the disclosure concept none of the options is correct