Question: Grant Company has had a record-breaking year in terms of growth in sales and profitability. However, market research indicates that it will experience operating losses

Grant Company has had a record-breaking year in terms of growth in sales and profitability. However, market research indicates that it will experience operating losses in two of its major businesses next year. The controller has proposed that the company record a provision for these future losses this year, since it can afford to take the charge and still show good results. Advise the controller on the appropriateness of this charge.

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