Deep Exploration Company Limited has been operating in Umukobia, a town in South-South Nigeria. Due to the pollution caused by exploration and production of crude oil in the area, the farmers and fishermen have been unable to farm or fish. The women who depended on the farm produce and fishes to sell in the local markets have since lost their livelihoods. Most of the women now take succor in menial jobs in the city in order to feed their children. The people of Umukobia took the Company to court on 10 March 2015. The Company prepares its financial statements to 31 December every year. On 21 January 2019, the court is to finally rule on the case between Umukobia versus Deep Exploration Company Limited.
Required: Assume that the management of the Company is preparing its financial statements for the year ended 31 December 2018, advise the Company on the step to take with respect to the financial outcome of the anticipated ruling on the case.
Suggested answer to practice activity 23.2
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