Final answer:
A remote contingency in accounting does not need to be disclosed in financial statements as the possibility of a future event occurring that confirms the loss or realization of the asset is minimal.
Step-by-step explanation:
In accounting, a contingency refers to an existing condition, situation, or set of circumstances which involves uncertainty as to possible gain (gain contingency) or loss (loss contingency) that will ultimately be resolved when one or more future events occur or fail to occur.
The correct treatment for a contingency that is considered remote is that it does not need to be disclosed in the financial statements.
According to both U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), remote contingencies are not required to be disclosed or accrued because the chance of a future event occurring that would confirm the loss or the realization of the asset is so slight.
Therefore, the appropriate response to the question would be option (d) it does not need to be disclosed.