By the way to assist the accounting team in our decision-making process could you please make sure you reference any relevant sources relating to your advice, for example, AASBs, Corporations Act, and relevant websites

. 1. At our recent board meeting, several directors raised concerns about a pending legal claim against Beachlife Ltd. While Beachlife Ltd was in a strong financial position at 30 June 2017, one of its competitors is suing for patent infringement as at October 2017. The compensation claimed in relation to the patent infringement is $87 million. The hearing for the dispute had not been scheduled until July 2018. The legal adviser of Beachlife Ltd was of opinion that there was 30% chance that Beachlife Ltd would be found guilty. There was 60% chance that Beachlife Ltd would need to pay $50 million as compensation to the plaintiff, if it is found guilty, and 40% chance for $30 million compensation. Can you please provide advice regarding the correct accounting and disclosure of this legal claim?

2. Our company has recently entered into an agreement to sell equipment to Alpine Ltd for $180,000 on 12 December 2017. Beachlife Ltd will deliver the equipment on 22 December 2017, with payment due on 31 December 2017. The agreement states that, from the date of delivery, Beachlife Ltd must provide maintenance for this equipment for the first 12 months. Alpine Ltd is entitled to a refund of 15% of the amount paid if Beachlife Ltd does not satisfactorily maintain the equipment for the year as required. Beachlife Ltd estimates the fair value of maintaining the equipment throughout the year to be $15,000. The board cannot agree on the appropriate accounting treatment for this sale agreement. Could you please provide advice on the correct presentation of the revenue and related costs?