Company X completed a profitable year due to revenue growth and great profit margin. However, the owner
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Company X completed a profitable year due to revenue growth and great profit margin. However, the owner projects that the company will not be profitable due to forecasted downturn in sales from 2 of its major business segments in the coming year. He spoke to you, the CFO of the company, and asked that the company records a provision for these future losses this year, to minimize the profit and still show good results. You need to advise him on the appropriateness of this charge.
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