A$4-22$ Contingencies $($LO$4\mathrm{.}8)$:

Unlimited Possibilities Ltd$.($UPL$)$ is finalizing the financial statements for $20$X$5.$ The company's managers are uncertain how each of the following events and situations should be reported:

a$.$ UPL is the guarantor on a $$10$ million bank loan that was obtained by another company controlled by the same shareholders who control UPL. The amount of the guaranteed loan is a material amount for UPL.

b$.$ UPL has a subsidiary in Japan. UPL has reached an agreement to sell the Japanese subsidiary to a Taiwanese company, subject to approval by regulators in Japan. When the sale closes, UPL will realize a profit of $$20$ million as the purchase price is $$20$ million higher than the subsidiary's net book value. Approval is expected, but it will be at least six months before the regulators issue their final ruling.

c$.$ An existing customer declared bankruptcy in February $20$x$6.$

Required:

Discuss the appropriate reporting for each of these three items on UPL's $20$X$5$ financial statements assuming UPL confirms to IFRS.