2. "Your client has a number of signicant contracts at year end (30 June 2008) for the future shipping of its commodity based products to factories in China. Due to the impacts of the credit crisis a number of these contracts are no longer viable and since year end your client has failed to comply with the contractual terms. As a result several shipping lines have claimed compensation for loss, which you have become aware of whilst considering subsequent events. You have recommended to your client: a) To include a subsequent events note in the financial statements for the year ended 30 June 2008. b) To include a subsequent events note in the financial statements and Director's report for the year ended 30 June 2008. c) To record a provision in respect of full amount of the likely compensation as at 30 June 2008. d) Not to make any adjustment or include any note disclosures in respect of the compensation claims in the financial statements as at 30 June 2008