Ellis Ltd is a local construction company. The regulation in the construction sector requires

employers to provide personal protective equipment for every employee. The company failed to

do that, and a Plumber got involved in an accident in the course of work resulting in a serious and

costly injury. The Plumber has sued the company. The Solicitors of the company have prepared to

vigorously defend the company in the lawsuit. They estimated that the company would have to

make a compensation of GH$17,000$ to cover the injured party$$s costs. A court decision, however,

is not expected for at least a year.

Required:

What aspects of the conceptual framework might help you in determining the appropriate

accounting treatment for this situation?