Porter is finalising its financial statements for the year ended 30 September 20X3.A former employee of Porter has initiated legal action for damages against the company after being summarily dismissed in October 20X3. Porter ’s legal advisors feel that the employee will probably win the case and have given the company a reasonably accurate estimate of the damages which would be awarded. Porter has not decided whether to contest the case.How should this item be classified in the financial statements of Porter for the year ended 30 September 20X3?
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A USD100,000 B USD463,000 C USD500,000 D USD1,000,000
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A 1 only B 2 only C 3 only D None of these statements
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