Bird Ltd, a listed company, provides food to function centres that host events such asweddings and engagement parties. After an engagement party held by one of BirdLtd's customers in June 2017, 100 people became seriously ill, possibly as a resultof food poisoning from products sold by Bird Ltd. Legal proceedings werecommenced by legal representatives of the people seeking damages from Bird Ltd,which disputed liability by claiming that the function centre was at fault for handlingthe food incorrectly. Up to the date of authorisation for issue of the financialstatements for the year to 30 June 2017, Bird Ltd's lawyers advised that it wasprobable that Bird Ltd would not be found liable. However, two weeks after thefinancial statements were published and released to shareholders, Bird Ltd's lawyersadvised that, owing to developments in the case, it was probable that Bird Ltd wouldbe found liable and the estimated damages would be material to the company'sreported profits.Required:Explain whether Bird Ltd should recognise a liability for legal damages in its financialstatements as at 30 June 2017? How should it deal with the information it receivestwo weeks after the financial statements are published? You should refer to relevantparts of the AASB conceptual framework and AASB accounting standards in youranswer.