<br/> -ABC is being sued for breach of patent. The company suing
is claiming that a range of handbags that ABC has manufactured and subsequently sold are copies of their own designs. ABC has admitted that there are some similarities between the designs and that their designs were based on the other company’s handbags. However, lawyers are arguing that the differences between the handbag designs may be sufficient to avoid a finding of breach of patent. Legal advice has suggested that there is a 30% probability that ABC will be found guilty for breach of patent and has estimated that, if found guilty ABC will be required to pay $500,000 to the other company.
-Discuss fully how ABC Ltd should account for this event by:
-a,Applying the requirements of AASB 137;
-b,Applying the definitions and recognition criteria.
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