Cameron Ltd owns five large poultry farms in Parramatta. The City of Parramatta Council has taken legal action against the pollution in the Parramatta River, especially the pollution from chicken farms. The local council has sued Cameron Ltd for water pollution and is claiming that Cameron will have to pay fines.

Camerons lawyers have advised them that it is very likely that they will lose the case and may have to pay $15,000 for water pollution.

Required:

Should Cameron Ltd recognize a liability for this event? Justify your answer by reference to the definition and recognition criteria as per the Conceptual Framework.