Exercise $13-22($Algo$)$ Various transactions involving contingencies; financial statement effects; IFRS

$[$L$013-5,13-6,13-7]$

The following selected circumstances relate to pending lawsuits for Erismus, Incorporated Erismus's fiscal year ends on December $31.$

Financial statements are issued in March $2025.$ Erismus prepares its financial statements according to IFRS.

Required:

Indicate the amount Erismus would record as an asset, a liability or if no accrual would be necessary in the following circumstances.

Erismus is defending against a lawsuit. Erismus's management believes the company has a slightly worse than $\frac{50}{50}$ chance of

eventually prevailing in court, and that if it loses, the judgment will be $$2,300,000.$

Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it

loses, management believes that damages could fall anywhere in the range of $$3,300,000$ to $$5,300,000,$ with any damage in

that range equally likely.

Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it

loses, management believes that damages will eventually be $$6,300,000,$ with a present value of $$4,800,000.$

Erismus is a plaintiff in a lawsuit. Erismus's management believes it is probable that the company eventually will prevail in court,

and that if it prevails, the judgment will be $$2,300,000.$

Erismus is a plaintiff in a lawsuit. Erismus's management believes it is virtually certain that the company eventually will prevail in

court, and that if it prevails, the judgment will be $$1,150,000.$