QUESTION $4(8$ marks$)$ AquaDrill Ltd$.,$ an offshore drilling company, is facing multiple legal and operational uncertainties at the end of its financial year, $31$ December $2024.$ The company was informed by an environmental agency that it may be fined for a possible oil spill that occurred during offshore exploration in November $2024.$ The agency is still investigating the incident, but initial reports suggest AquaDrill is likely to be held responsible. The company$$s legal team estimates a $75\%$ chance of losing the case and a fine of approximately GH$3$ million if found liable. However, the outcome is expected to be confirmed by mid$-2025.$ In a separate matter, AquaDrill is involved in a lawsuit against a former supplier for breach of contract. The company is claiming GH$5$ million in damages. Based on advice from its legal counsel, there is a $65\%$ chance of winning the case, but if successful, the company expects to recover the full GH$5$ million. The finance director is considering whether this should be recognized as a contingent asset or included in the financial statements. Additionally, AquaDrill has entered into a non$-$cancellable maintenance agreement for its drilling equipment for the next $3$ years. Due to falling oil prices, the company plans to suspend operations at two rigs covered by the contract. If this happens, the maintenance contract will result in unavoidable costs of GH$1\mathrm{.}2$ million annually with no associated economic benefit. Management is uncertain whether they should recognize any liability related to this contract. Required: Demonstrate how AquaDrill should account for the above cases as at $31$ December $2024$ in accordance with IAS $37$ Provisions, Contingent Liabilities and Contingent Assets.