The financial accounting record's for Raxy Ltd showed the two legal claims unsettled;

RAXY took the legal action claiming P150,000 damages against a third party. The management commenced the legal in April 2019 and it is close to its completion. In both cases, it is more likely than not that the amount claimed will have to be paid.

Required

Recommend to Raxy Ltd how best they should report the above in their financial reports for the year ended 31 Msy 2021.