Question
During December 2022, AgriVet, an agricultural company, discovered that chemical pesticides from its farm areas had polluted a public reservoir in the area. Under the
During December 2022, AgriVet, an agricultural company, discovered that chemical pesticides from its farm areas had polluted a public reservoir in the area. Under the countrys environmental laws, AgriVet would have to pay a fine of $1 million and bear the costs of cleaning the waterways. The cost of cleaning the waterways was $2 million. As at March 15, 2023, the date of release of its financial statements, no action had been taken against AgriVet. When AgriVet began its farm operations many years ago, it announced its commitment to maintaining a pollution-free environment. Explain how the event should be accounted for in AgriVets financial statements for the year ended December 31, 2022
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