Contingent Liability Treatment on Balance Sheet

XYZ Holding Company has recently undergone a significant restructuring and completed its annual financial reporting. The Balance Sheet reflects various financial instruments and obligations as of December 31, 2023. Observing the balance sheet, you note the following values:

• Total Assets: $2,500,000
• Total Liabilities: $1,500,000
• Equity: $1,000,000

In context, the company issued $500,000 in preferred stock during the year and recorded an increase in accounts payable totaling $300,000. In addition, contingent liabilities relating to a lawsuit were disclosed, but no amounts were included in the liabilities section due to lack of certainty. How does this contingent liability affect the presentation of the Balance Sheet according to generally accepted accounting principles (GAAP)?