A contingent gain is a potential increase in assets that has not yet occurred. A contingent gain is not recognized in the financial statements until the transaction has been settled. For example, an organization is suing another party for $1,000,000. The $1,000,000 is considered a contingent gain, but is not reported until the lawsuit has been settled for that amount. However, it is possible to describe the nature of the gain in the disclosures that accompany the financial statements, as long as the description is not misleading regarding when the gain might occur.