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The issue faced by the accountant of Suwit Semailee Berhad (SSB) was how to allocate...

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Accounting

The issue faced by the accountant of Suwit Semailee Berhad (SSB) was how to allocate the accounting treatment for the total payment in a losing legal case for the amount of RM 1,000,000 as the accountant is unfamiliar with the issue and is unsure how to account for the court case. The accountant faces the issue where if Boleh Jadi Berhad (BJB) will win, what is the accounting treatment for the obligation of Suwit Semailee Berhad (SSB) to be recorded in the balance sheet and in the income statement. In this issue, the Suwit Semailee Berhad (SSB) should disclosure the lawsuit as a contingent liability. The provision for the lawsuit is recognized during the year 2019 as there was a lawsuit in which it is only possible that the company might lose. The issue stated that the SSB is losing the case, if the amount of the loss from lawsuit can be measured with sufficient reliability, a provision should be made regarding to the payment. (c) Help the accountant of SSB to make a decision related to the above issue(s)

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