Pacific Company Acquired Starz Company for $100 Million and Recognized

Pacific Company acquired Starz Company for $100 million and recognized $70 million in goodwill. When it recorded the acquisition, Pacific recognized an additional liability not already reported on Starz' balance sheet, for a pending lawsuit against Starz, and estimated its value at $12 million. Three months after the date of acquisition, Pacific determined that the present value of the lawsuit liability was really $2 million, because of events occurring subsequent to the date of acquisition.
How is this information reported?

A) Loss on acquisition of $10 million
B) Gain on lawsuit of $10 million
C) Reduction in goodwill of $10 million
D) Not reported