Before the financial statements could be released, they would need to be adjusted for significant events that occurred after the balance sheet date. settlement of a lawsuit, in excess of the liability, previously recorded.
Settlement is the legal term for a compromise or agreement between disputing parties to resolve their differences in order to end their legal conflict.
The prosecution of the action is often abandoned or discontinued as a result of the settlement, and no judgment is rendered .
In certain situations, the litigation cannot be restarted because the settlement itself is a legally binding agreement between the parties. However, the settlement terms may—and frequently do—be included by the parties in a consent judgment that is filed with the court.
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