Exhibit 3 - Provision At a recent board meeting, a director of Worldwide Fuels has the following questions: At 31 December 2020, Worldwide Fuels was engaged in a legal dispute with a customer who alleged that Worldwide Fuels has supplied faulty products that caused the customer an actual financial loss. The lawyers of Worldwide Fuels consider that the consumer has a 70% chance of succeeding in this action and that the likely outcome, should the customer succeed, is that the customer will be rewarded damages of 1.5 million. The directors of Worldwide Fuels believe that the fault in the products was caused by the supply of defective components by one of the suppliers to Worldwide Fuels. Worldwide Fuels has initiated legal action against the supplier and considers that there is a 70% chance that Worldwide Fuels will receive 910,000 of compensation from the supplier. I expected to see a provision for legal claims based on the likelihood of the claims succeeding. However, I also expected to see an equivalent asset in respect of amounts that Worldwide Fuels expects to receive from the legal action against the supplier. The financial statements do contain a provision of 1.5 million but no equivalent asset. Disclosure of the information relating to both, the claim against Worldwide Fuels and the compensation that is expected to be received from the supplier, is made in the notes to the financial statements. How can it be the correct accounting treatment to include a liability but not the corresponding asset, given the above facts?.+ ii) "Worldwide Fuels operates profitably from a factory that it leases for five years under an operating lease. At 31 December 2020, the market rent for the factory is 800 per month while the monthly operating lease instalments that we pay are 1,350 per month. I would have expected to see a provision from the onerous contract in the consolidated statement of financial position." Using Exhibit 3, provide answers to the queries raised by the director. You should justify your answers with reference to relevant IFRS Standards. [20 Marks] (350 words)