Question: Smart Mining Ltd is facing a lawsuit from a community group for alleged environmental damage caused by its operations. It is very likely that Smart

Smart Mining Ltd is facing a lawsuit from a community group for alleged environmental damage caused by its operations. It is very likely that Smart Mining Ltd will lose the case. As at 30 June 2025, the lawyers have advised Smart Mining Ltd that at this time the total amount of damages to be paid by Smart Mining Ltd is $950,000. Required: Should Smart Mining Ltd recognize a liability and an expense on 30 June 2025? Justify your answer by reference to the definition and recognition criteria contained in the Conceptual Framework for Financial Reporting

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