Answer the following two independent scenarios.

(a) Ramsay's Restaurants (RR) operates several high end restaurants in all major capital cities in Australia. The managing director of RR, Gordon Gecko received a legal letter from Dodgy Brothers Lawyers stating that they are representing a client who recently ate at one of RR's restaurants and came down with severe food poisoning. The are claiming damages of $250,000 for medical bills, and lost income as they were unable to work. Gordon, known to his staff as GG, sort legal advice. The lawyers for RR believe that the chance of RR losing this case is very remote when it goes to court. As reporting season is just around the corner, GG wants to know how this pending legal case will be accounted for.

Applying AASB 137 and the conceptual framework, advise GG whether there is a liability, provision, or contingent.

(b) Waste from RR's new restaurant contaminated the groundwater in a pristine national park. In a lawsuit brought against the RR, members of the local community seek compensation for damages to their health as a result of the contamination. The RR acknowledges its wrongdoing and the court is deciding on the extent of the compensation to be awarded to the members of the local community. It is uncertain when the ruling will take place but the entitys lawyers expect it will take place in about 2 years time and they estimate that the compensation awarded by the court will be in the range $10,000 to $1 million.

Applying AASB 137 and the conceptual framework, advise whether there is a liability, provision, or contingent and the required accounting treatment