An article titled BHP faces $9b dam lawsuit in The Australian Financial Review (by Will Willitts, p.
Question:
An article titled ‘BHP faces $9b dam lawsuit’ in The Australian Financial Review (by Will Willitts, p. 19) published on 8 November 2018, reported that BHP faces a £5 billion ($9 billion) lawsuit over the failure of the Samarco dam in Brazil in November 2015. Waste and sludge from a dam that collapsed flowed through the village of Bento Rodrigues, destroying homes, contaminating water, and killing 19 people. The claim was being brought for damages by lawyers on behalf of 240,000 individuals who were victims of the disaster.
Required:
1. In light of the brief information provided above, how do you believe that BHP should disclose information about this claim in its annual report?
2. Given that the dam failed in 2015, and this particular action was taken in 2018, when is the earliest accounting period in which BHP should have made some form of disclosure about the dam collapse?
Expert Answer:
Requirement A BHP should disclose the lawsuit as part of contingent liability and the information sh... View the full answer
