1. Northstar Resources is now involved in a class action suit brought about by the farmers. They are suing for $100 million in compensation for their land, which is now unusable because of the oil spill. The company’s lawyers deem they can settle for 15% of that amount. 2. In an unrelated matter in July 2021 a competitor commenced a suit against Northstar Resources alleging violation of antitrust laws and seeking damages of $2.5 million. Northstar Resources denies the allegations, and the likelihood that Northstar Resources will have to pay any damages is remote.
1. Northstar Resources is now involved in a class action suit brought about by the farmers. They are suing for $100 million in compensation for their land, which is now unusable because of the oil spill. The company’s lawyers deem they can settle for 15% of that amount.
2. In an unrelated matter in July 2021 a competitor commenced a suit against Northstar Resources alleging violation of antitrust laws and seeking damages of $2.5 million. Northstar Resources denies the allegations, and the likelihood that Northstar Resources will have to pay any damages is remote.
Discuss the financial reporting issues (recognize or do not recognize) and provide recommendation(s) on how to handle each situation. As you write, keep your audience in mind.
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