Holmes Watson $($HW$)$ is considering what the effect would be of reporting its liabilities under IFRS rather than U$.$S$.$ GAAP. The following facts apply: a$.$ HW is defending against a lawsuit and believes it is virtually certain to lose in court. If it loses the lawsuit, management estimates it will need to pay a range of damages that falls between $$5,000,000$ and $$10,000,000,$ with each amount in that range equally likely. b$.$ HW is defending against another lawsuit that is identical to item $($a$),$ but the relevant losses will only occur far into the future. The present values of the endpoints of the range are $$3,000,000$ and $$8,000,000,$ with the timing of cash flow somewhat uncertain. HW considers these effects of the time value of money to be material. c$.$ HW is defending against another lawsuit for which management believes HW has a slightly better than $50/50$ chance of losing in court. If it loses the lawsuit, management estimates HW will need to pay a range of damages that falls between $$3,000,000$ and $$9,000,000,$ with each amount in that range equally likely. d$.$ HW has $$10,000,000$ of short$-$term debt that it intends to refinance on a long$-$term basis. Soon after the balance sheet date, but before issuance of the financial statements, HW obtained the financing necessary to refinance the debt. Required: $1.$ For each item, indicate how treatment of the amount would differ between U$.$S$.$ GAAP and IFRS. $2.$ Consider the total effect of items a$-$d$.$ If HW$\text{'}$s goal is to show the lowest total liabilities, which set of standards, U$.$S$.$ GAAP or IFS, best helps it meet thatgoal?