Case 2: You are an expert who deals with the transactions related to provisions, contingent assets, contingent liabilities and intangible assets. For each of the scenario mentioned below provide with an appropriate solution with accounting treatment, calculations and necessary comments: (4 x 2.5 marks each = 10 marks) 1. The company is sued for contributing to water pollution for RO 1.5 million and it believes that it will have to pay this amount in full. It will also have to pay RO 200,000 for making changes to its production plant to avoid any further legal action. 2. The company also has to rectify a serious fault in a piece of equipment that it had sold to a customer. The individual most likely outcome is that the repair will succeed at the first attempt at a cost of RO 30,000, but there is a chance that a further attempt will be necessary, increasing the total cost to RO 35,000. 3. The company owns various franchises that amounts to RO 100,000 on the balance sheet date. They all are currently held at cost. The company has decided to revalue only half of its franchise and remaining will be shown at cost. 4. The company also recently has bought a patent for RO 60,000 for a seasonal product. It is estimated that it will be valid for 20,000 units over its useful life. No residual value is anticipated. Around 5,000 units were tested by the end of the current year.