Question 2 Answer all parts of this question Belgrave plc is a manufacturer of canned foods. On 10 November 2014, the company was sued by one of its customers, who claimed to have been harmed by one of Belgrave plc's products. On 31 December 2014, the following information was available about Belgrave plc's legal case: In the opinion of Belgrave pic's legal advisers, there was a 40% probability that Belgrave plc would be found liable; Belgrave plc's management estimated that, if Belgrave plc was found liable, it would have to incur costs ranging between 18,000 and 25,000. - Belgrave plc's management decided to report a provision of 25,000 in relation to the legal case on Belgrave plc's consolidated statement of financial position at 31 December 2014. The legal case was examined by a court of law during March 2015. The judge found no merit in the customer's claims and the case was dismissed. Required: a) Explain whether, at 31 December 2014, the legal dispute meets the IFRS definition of liability for Belgrave plc. 7 marks b) Explain how you would have accounted for the legal dispute in Belgrave plc's financial statements for the financial year ending 31 December 2014, according to IFRS rules. 7 marks c) Speculate about the intentions of Belgrave plc's management in reporting the legal dispute as a provision at 31 December 2014. 6 marks