Brekky ltd has recently been sued by several customers for wrongly claiming that their breakfast cereals would boost a child's immune system and lead to improved health outcomes At 30 june 2020, the court had determined that brekky ltd will be liable for damages due to a lack of scientific evidence to support their claim of improved health outcomes. these damages will be advised on 30th of december. The solicitor advised the brekky ltd that the damages are likely to be between $100,000 to $2.5 million

Required:

With reference to aasb 137 provisions, contingent liabilities and contingent assets, advise brekky ltd how this event should be treated in the financial statements for the year ended 30 june 2020.

Answer rating: 100% (QA)

As the court has decided on June 302020 that Brekky Ltd is liable for damage due to lack of scientif... View the full answer