Required: For each of the situations below: a) Discuss the accounting treatment and disclosure required by IAS 37 to do this you need to firstly decide, by reference to the definitions and criteria covered in the lecture, whether the item is a provision, a contingent liability, a contingent asset or none of these. b) Prepare the appropriate journal entry c) Using the attached table, show the impact on the following elements of the financial statements of each company: a. Profit for the year b. Assets c. Liabilities d. Equity Assume each company has a year end of 31 October 2023. a) During some recent construction work, Company A destroyed some public parkland. Contractually the company is obliged to pay to rectify such damage. As a goodwill gesture, the company has also volunteered to upgrade a childrens playground situated at the edge of the parkland. The cost to rectify the damage is 100,000 and the cost of upgrading the playground is 40,000. Both costs are expected to be incurred in the first quarter of 2024. b) At a Board Meeting held in October 2023, the directors of Company B agreed to close down a manufacturing plant in Inverness. Redundancy and other closing down costs are roughly estimated to be somewhere around 1.5 million although no detailed breakdown of this cost has been prepared. At the year end no action has been implemented in relation to this plan and the plan itself has not been communicated throughout the company. c) The directors of Company C have also discussed a restructuring plan. They estimate the redundancy and other direct expenditure arising from the restructure will total 850,000. It is also expected that some existing staff will require to be redeployed within the organisation. Associated training costs are estimated at 200,000. The plan was announced to staff at a meeting held on 15 October 2023, negotiations have commenced with the unions concerning termination payments and excess plant and equipment has been advertised for sale. d) On 30 September 2023, Company D received notification that one of its customers has started legal proceedings to sue for damages which they allege were caused by badly made and dangerous products sold by the company. The companys legal advisors are of the opinion that the customer will probably win the case estimate damages and, if it does, legal costs of 500,000 will be awarded to the customer. e) In response to the legal action described in d) above, Company D instructed its lawyers to sue its supplier of component parts used in the products claimed to be dangerous. The companys legal advisors are of the opinion the company will probably win the case and the compensation awarded to the company is estimated to be 250,000. f) Company E operates an offshore oilfield where the licensing agreement requires it to remove the oil platform at the end of production and restore the seabed. The oilfield became operational in January 2023 with its end of life expected around 2053. The future costs relating to the removal of the platform and restoration of the damage caused by building it are estimated to be 20,000,000. The present value of the costs is estimated to be 4,500,000. g) Company F signed a contract with a new customer in January 2023 to build some equipment. The work has begun and the equipment was due to be completed and delivered by 30 September 2023. Unfortunately, the company experienced some manufacturing delays and the best estimate of delivery date is now 30 November 2023. The contract stipulates penalties for late delivery will be payable at a rate of 1,000 per day over the due date. h) Company G sells coffee machines with a 6 month warranty. If minor defects were to be detected in all machines sold in the last 6 months of the financial year, the estimated repair costs would be 300,000. If major faults were detected in these machines, the estimated repair costs would be 1,000,000. Based on past experience of actual warranty claims on these machines, the company estimates the chances of there being no defects to be 75%, minor defects, 15% and major defects 10%. i) A former employee of Company I is suing for unfair dismissal, claiming damages of 750,000. The companys legal counsel considers the chances of the employee tribunal finding in favour of the former employee to be less than 50%. The case will be heard in January 2024