The following are two independent situations. The underlined entity is the reporting entity.

$($i$)($Click the icon to view the situations.$)$

Required

a $($i$)$ Assuming that the reporting company prepares its financial statements in accordance with IFRS, indicate

whether the appropriate accounting treatment is to $($A$)$ recognize a liability or $($B$)$ disclose the details of the

contingency in the notes to the financial statements.

Describe how the event should be dealt with in the financial statements and explain why.

The loss is

to be provided for. The

is used to

determine the amount of the obligation based on legal counsel's best estimate of the amount required to settle the

obligation.

Prepare the required entry, if any, for situation $($i$).($If no entry is required, enter $"$No entry required" on the first line

of the journal entry. Record debits first, then credits. Leave any unused cells blank. Explanations are not required.$)$

$($ii$)Th$

used to determine the amount of the obligation based on legal counsel's

best estimate of the amount required to $\text{'}$ settle the obligation.

Prepare the required entry, if any, for situation $($ii$).($If no entry is required, enter $"$No entry required" on the first line

of the journal entry. Record debits first, then credits. Leave any unused cells blank. Explanations are not required.$)$