During 2018, Josephine company was sued by a competitor for P1,500,000 for infringement of a patent. Based on the advice of the entity’s legal counsel, Josephine company accrued the sum of P900,000 as a provision in its financial statements for the year ended December 31, 2018. Subsequently, on March 15, 2019, the supreme court decided in favor of the party alleging infringement of the patent and ordered the defendant to pay the aggrieved party a sum of P1,050,000. The financial statements were prepared by the entity’s management on February 15, 2019 and approved by the board of directors on March 31, 2019. How much should be recognized as accrued liability on December 31, 2018? PLS provide solution and explanation for the answer above Philippines Accounting standard
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During 2018, Josephine company was sued by a competitor for P1,500,000 for infringement of a patent. Based on the advice
of the entity’s legal counsel, Josephine company accrued the sum of P900,000 as a provision in its financial statements for the
year ended December 31, 2018. Subsequently, on March 15, 2019, the supreme court decided in favor of the party alleging
infringement of the patent and ordered the defendant to pay the aggrieved party a sum of P1,050,000. The financial statements
were prepared by the entity’s management on February 15, 2019 and approved by the board of directors on March 31, 2019.
How much should be recognized as accrued liability on December 31, 2018?
PLS provide solution and explanation for the answer above
Philippines Accounting standard
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