In 6T May 2019, Abby PIc, a steel company located at Nilai, N.S. (which prepares financial statements to 31 December) guaranteed a $100,000 bank loan provided to MM Ltd. MM Ltd was in a strong financial position at 31 December 2019, but this had worsened by 31 December 2020 and it seemed likely on that date that Abby Plc would be required to honour its guarantee Explain how this guarantee should be treated in the Financial statements of Abby Pic at 31 December 20 V and 2020.

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