During the year 2018, Santana limited was sued by a competitor for 15 million Ghana cedis for infringement of a trademark. based on the advice of the company's legal counsel, Santana limited accrued the sum of 10 million Ghana cedis as a provision in its financial statements for the year ended December 31, 2018.

subsequent to the reporting date, on February 15, 2019, the supreme court decided in favor of the party alleging infringement of the trademark and ordered the defendant to pay the aggrieved party a sum of 14 million ghana cedis.

The financial statements were prepared by the company's management on January 31, 2019, and approved by the board on February 20, 2019.

Required:

In accordance with IAS 10: Events after the reporting period, explain with justification, the appropriate accounting treatment of the above transaction.

Answer rating: 100% (QA)

As per IAS 10 events after the reporting period contingent assets should ... View the full answer