Sid Berhad year end is 31 December 2020. The accountant of Sid Berhad has asked for your opinion on the accounting treatment of the following items:

(v) One of Sid Berhad’s product has suffered some bad publicity as a result of a customer claiming to have harm his health condition. The customer filed a court case in December 2020 claiming damages of RM100,000. Sid’s lawyer advised the company that the most probable outcome is that the company will have to pay the customer RM80,000.

Required:

Advise Sid Berhad’s accountant on the accounting treatments for all the above- mentioned items. Your answer shall make reference to relevant MFRS Standards.