Using the decision tree from the Guidance (Part B) section of AASB 137 Provisions, Contingent Liabilities and Contingent Assets, determine the effect of each of the following events on the respective companys balance sheet:

a) Dallas Bonnet Ltd is a large manufacturer of coffee machines and provides a two-year warranty for all its products from the time of purchase by offering to repair or replace the item. On past experience, it is probable (that is, more likely than not) that there will be some claims under the warranties.

b) Land Fire Authority (LFA) operates a firefighter training facility near Hortonville. During the reporting period, it became evident that the chemicals burnt as part of the fire drills contaminated the nearby farmland. The LFA made a public announcement to compensate the farmers for the contamination. There is no environmental legislation on this form of soil contamination.

c) On 1 January 2016, the Board of Directors of Complex Solutions Ltd, an accounting firm, determined the business should be restructured following a review of the profitability of their operations. Before the end of the current reporting period (30 June 2017) it was decided that the restructuring plan will involve the termination of its consulting business. The restructure was formally approved on 25 January 2017, specifying:

Businesses concerned

Principal locations affected

Location, function and approximate number of employees who will be terminated

Expenditure to be incurred

Estimate of when the plan will be implemented.

The restructure was formally announced to the company and to the public on 1 March 2016 and an implementation date of 1 September 2017 had been set.

The company had not identified the individual managers affected; however, the announcement of the plan was sufficiently detailed to identify the potential impact and to understand what their claims may be.

d) In July 2015, a tourist, who rented a Segway scooter from Kangaroo Tours Ltd, crashed into a cyclist on a busy intersection. The tourist was unharmed but the cyclist was hospitalised, while the scooter and road bike were completely destroyed. That the tour conductor on the day forgot to get the tour participants to sign the insurance claim forms. Therefore, the cyclist started seeking damages for a total of $100,000 from the Kangaroo Tours, but the company disputes liability. Up to the date of authorisation of the financial statements for the year to 30 June 2016, the entitys lawyers advise that it is probable that the entity will not be found liable. However, when the entity prepares the financial statements for the year to 30 June 2017, its lawyers advise that, owing to developments in the case, it is probable that the entity will be found liable. What was the business required to report in its report for the financial year end 30 June 2016? What will it report for the financial year end 30 June 2017?

Note: You may use the AASB 137 decision tree to form your answer.