PART A A cargo ship owned by Western Shipping Company (WSC) docked at the Kingston harbour...

 

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PART A A cargo ship owned by Western Shipping Company (WSC) docked at the Kingston harbour on 1 June 2021. The ship caused an oil spill on the 5 June 2021 and left the following day without cleaning up the spill. The Jamaican Government contacts the head office in Chicago and makes a formal request for the oil spill to be cleaned up. There are no laws in Jamaica regarding liability for oil spills. The government of Jamaica disclosed that WSC caused 15 oil spills in 10 different countries over the last 2 years and cleaned up the spill on each occasion. The management of WSC confirms this to be a fact. REQUIRED: How should the accountants of Western Shipping Company treat with the above scenario in accordance with IAS 37? (14 marks) PART B The directors of Hanover Enterprise Limited (HEL)are uncertain of the difference between a provision and a contingent liability. Write a brief explanation explaining both concepts to give clarity. them (6 marks) PART A A cargo ship owned by Western Shipping Company (WSC) docked at the Kingston harbour on 1 June 2021. The ship caused an oil spill on the 5 June 2021 and left the following day without cleaning up the spill. The Jamaican Government contacts the head office in Chicago and makes a formal request for the oil spill to be cleaned up. There are no laws in Jamaica regarding liability for oil spills. The government of Jamaica disclosed that WSC caused 15 oil spills in 10 different countries over the last 2 years and cleaned up the spill on each occasion. The management of WSC confirms this to be a fact. REQUIRED: How should the accountants of Western Shipping Company treat with the above scenario in accordance with IAS 37? (14 marks) PART B The directors of Hanover Enterprise Limited (HEL)are uncertain of the difference between a provision and a contingent liability. Write a brief explanation explaining both concepts to give clarity. them (6 marks)

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PART A The accountants of Western Shipping Company should recognize a provision for the oil spill in ... View the full answer