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  3. 3. mm has the following two legal claims outstandi

3. MM has the following two legal claims outstanding: - A legal action claiming compensation...

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Accounting

image 3. MM has the following two legal claims outstanding: - A legal action claiming compensation of 650,000 filed against MM in March 2020 . - A legal action taken by MM against a third party, claiming damages of 350,000 was started in January 2019 and is nearing completion. In both cases, it is more likely than not that the amount claimed will have to be paid. How should MM report these legal actions in its financial statements for the year ended 31 March 2020 ? 4. Tango Plc is preparing its financial statements for the year ended 30 September 2022. The company is facing a number of legal claims from its customers with regards to a faulty product sold. The total amount being claimed is 8.7 million. The company's lawyers say that the customers have an 75% chance of being successful. According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, what amount, if any, should be recognised in respect of the above in Tango Plc's statement of financial position as at 30 September 2020 ? A. 8.7 million B. 6.525 million C. 2.175 million D. No amount should be recognised

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