After a wedding in the year 200W ten people died, possibly as a result of food poisoning from products sold by Crippen Limited. Legal proceedings are initiated seeking damages from Crippen but it disputes liability. Up to the date of approval of the financial statements for the year to 31 December 200W, Crippen’s lawyers advise that it is probable that it will not be found liable. However, when Crippen prepares the financial statements for the year to 31 December 200X its lawyers advise that, owing to developments in the case, it is probable that it will be found liable.

Requirement What is the required accounting treatment at:

(a) 31 December 200W; and

(b) 31 December 200X?.