2.2 XYZ LIMITED is in the process of issuing its financial statements for the year ended 30 June 2020. In a meeting of Board of Directors held on 31 August 2020, the directors authorized the issue of financial statements to shareholders. Consider the impact (if any) of the following events after the reporting period on the financial statements of XYZ LIMITED for the year ended 30 June 2020 assuming they have not already been accounted for: 2.2.2 During the year, a customer had sued XYZ LIMITED for damages that he claims to have suffered as a direct result of the faulty goods supplied to him by XYZ LIMITED. At the year end, the litigation was in process and the Court had not reached a verdict. The Company's legal advisors suggested that the chance of an adverse opinion against XYZ LIMITED was very low as the contract with the customer explicitly states that the company shall not be liable to such claims. Consequently, no liability was recognized in the financial statements and neither was the contingency disclosed. On 28 August 2020, the court issued a verdict against XYZ LIMITED and ordered the payment of damages amounting R5 million to the claimant within 30 days. The CFO is of the view that the financial statements need not be adjusted because the obligation to pay damages to the customer arose after the year end upon the decision of the court. How should the liability for payment of damages be accounted for in the financial statements for the year ended 30 June 2020? Is the argument of the CFO valid and why? as