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John supplies crab to a local restaurant. In September 2020 he supplied the restaurant with some crab, and now he has h.ind that some of
John supplies crab to a local restaurant. In September 2020 he supplied the restaurant with some crab, and now he has h.ind that some of the restaurant's customers have suffered attacks of food poisoning. The restaurant has claimed that this is because of John's crab, and has commenced legal action against him. Andrew, a local solicitor who specialises in food-poisoning cases, has advised John that he has a 45% chance of losing the case, and that, if he does lose, he will probably have to pay RM 500,000 to settle the liability. Required What is the nature of John's liability, if any, and how should it be treated in his financial statements for the year ended 30 September 2020
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