a) Describe the three essential characteristics of Liabilities. (3 marks)

b) What distinguishes contingent liabilities not recognized in the accounts from a liability which is recognized on the statement of financial position? Explain (2 marks)

c) On October 4, 2019, a lawsuit for breach of contract seeking damages of $1,000,000 was filed by an designer against Slick Corp. Slick's legal counsel believe that the outcome will be unfavourable and would result in Slick paying $700,000 for damages. Discuss the proper accounting treatment and disclosure requirements for Slick under IFRS. (6 marks)