Extraction Friendly Ltd$.($EFL$)$ specializes in extracting lithium ore. It prides itself on following high environmental Itandards in the extraction process. On January $1,2019,$ EFL purchased the rights to use a parcel of land from the province of New Brunswick. The rights cost $$15,000,000$ and allowed the company to extract lithium ore for five years, i$.$e$.,$ until Dec $31,2023.$ At the end of the contract, EFL has one year to clean up and restore the land. At the acquisition of the mining rights, EFL estimates this will cost $$2,000,000.$After $2023,$ EFL was supposed to clean up and restore the land. Even though the company spent a considerable amount of money on restoration, it was sued by the province of New Brunswick for not following the contract's requirements.On February $3,2025,$ a judgment was rendered against EFL for $$3,000,000$ by the Provincial Court of New Brunswick. The company claims that because the language in the contract was misleading regarding the restoration costs, it plans to appeal to the judgment to the Court of Appeal and expects the ruling to be reduced to anywhere between $$1,000,000$ and $$2,000,000,$ with $$1,500,000$ being the probable amount. EFL has not yet released its $2024$ financial statements.As a helpful suggestion, you may want to draw a timeline of events before solving the questions given below.Instructions $|$Discuss how EFL should report this matter on its financial statements, including the accrual amounts, if any, and disclosures, for the year ended December $31,2024.$