Metalworks manufacturers of safety helmets had to write off £120,000 being the cost of helmets which had to be destroyed because they failed the safety test. Metalworks has filed a court action claiming £90,000 from the new suppliers of raw material on the premise that defective material supply was responsible for the loss. The suppliers are contesting the claim. The legal advice is that there is around a 20 to 40% chance of success for the claim.

Required:

Should Metalworks account for the claim as an asset at £90,000?