Houston Company is involved in a lawsuit.In which of the following situations is only a note disclosure of the contingent liability reported within the financial statements?

A) When the loss is remote and the amount cannot be reasonably estimated.
B) When the loss is probable and the amount can be reasonably estimated.
C) When the loss is reasonably possible and the amount can be reasonably estimated.
D) When the loss is remote and the amount can be reasonably estimated.

Note Disclosure

Additional information provided in a company's financial statements, explaining the numbers presented in the statements for clarity and completeness.

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a certain event.

Financial Statements

A set of formal documents tracking the financial activities, status, and cash flows of a business, providing insight into its financial health over a specified period.