Buzz has the following 2 legal claims outstanding:

1. legal action claiming compensation of 750,000 (based on best estimate before issue date of financial statements) filed against Buzz on 1 march 2020

2. legal action taken by Buzz against a third party, claiming damages of 350,000 (based on best estimate before issue date of fin. statements), which was started in Jan

In both cases, it is more likely than not that the amount claimed will have to be paid or received.

Required: How should Buzz report these legal actions in its financial statements for the year ended 31 march 2020?

A) legal action against Buzz Provision; Legal action by Buzz: Contingent asset

B) legal action against Buzz Provision; Legal action by Buzz: Asset

C) legal action against Buzz; Liability; Legal action by Buzz: Contingent asset

D) legal action against Buzz; do nothing; legal action by Buzz: do nothing