Fast Food Ltd is a food company. The company was recently involved in an incident that resulted in the serious illness of 20 people possibly as a result of food poisoning from products sold by the company. Legal proceedings are started seeking damages from the entity for $2 million, but the company disputes the incident. Up to the date of authorisation of the financial statements for the year to 30 June 2021 for the issue, the company's lawyers advised that it is highly probable that the entity will be found liable.

Required

Analyse the above situation and provide a recommendation to the company using the AASB Framework on what should be the accounting treatment for the amount of damages using the AASB Framework.

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