SUBJECT: FINANCIAL ACCOUNTING & REPORTING

I NEED ANSWER FOR ALL

2) In which of the following circumstances might a provision be recognised? a. b. c. d. e. Waste from an entity's production process contaminated the groundwater at the entity's plant. In a lawsuit brought against the entity, members of the local community seek compensation for damages to their health as a result of the contamination. The entity acknowledges its wrong doing and the court is deciding on the extent of the compensation to be awarded to the members of the local community. It is uncertain when ruling will take place but the entity's lawyers expect it will take place in about two years and they estimate that the compensation awarded by the court will be RM25 million. Waste from an entity's production process contaminated the groundwater at the entity's plant. There is no court case. However, the entity is required by law to restore the contaminated environment. The entity estimates that such restoration will cost between RM15 million. The entity is unsure of the date by which it will be required to complete the restoration. Waste from an entity's production process contaminated the groundwater at the entity's plant. The entity is not required by the law to restore the contaminated environment and there is no court case. However, before the end of the current reporting period, the entity made a public announcement that it would restore the contaminated environment within the next 12 months. A manufacturer gives warranties to the purchasers of its goods. Under the terms of the warranty the manufacturer undertakes to make good, by repair or replacement, manufacturing defects that become apparent within 1 year from the date of sale to the purchasers. In a lawsuit brought against an entity, a group of people are collectively seeking compensation for damages to their health as a result of contamination to the nearby land believed to be caused by waste from that entity's production process. It is doubtful whether the entity is the source of the contamination because many entities operate in the same area producing similar waste and it is unclear which entity is the source of the leak. The entity denies any wrongdoing because it has taken precautions to avoid such leaks and so it is vigorously defending the case. However, the entity cannot be certain that it has not caused the leak and the true offender will become known only after extensive testing. The entity's lawyer expects a court ruling in about two years.