QUESTION 18 (IAS 37) Nkoso Ltd (Nkoso) is an agro-processing company which reports under International Financial Reporting Standards up to 31 December each year. On 10 October 2019, Nkoso organised a Christmas party at the companys head office in Accra. Unfortunately, there was an incident of food poisoning and the company has received 500 legal claims from victims of the food poisoning, seeking compensation of an average of GH5,000 each. A letter from Nkosos legal advisors, dated 10 December 2019, suggests 40% of these claims are likely to be successful. The Accountant of Nkoso does not want to make any provision for these claims on the grounds that less than 50% of the cl aims are likely to be successful. The legal advisors have suggested that an average of two years from the end of the current reporting period will elapse before the claims are settled. The risk related discount rate is estimated to be 10%. Required: In accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets, advise the directors of Nkoso on the appropriate accounting treatment of the above in the financial statements for the year ended 31 December 2019.