Answer
(a) No disclosure or accounting treatment is required. The possibility of a strike is not an economic event in accounting terms. This is an inherent business risk for which no accounting treatment is required.
(b) Disclosure of the nature and impact is required. A note should be included in the notes to the financial statements to describe and detail the unusual loss, its nature, and cause. This will help users to understand this item better.
(c) Only Disclosure, no recognition of contingent asset is required. Contingent assets that might have a significant impact on the financial position of the company are disclosed when it is more likely than not that the refund claim will be received.
Work Step by Step
No Steps involved
