Bob Joseph is evaluating two recent trnsactions involving exchanges of industrial machinery. In one case, the exchange has commercial substances. In the second situation the exchange lacks commercial substnce. Explain to Bob the differences in accounting for these two-situations

Consider the following independent situations. For each of the situations described, suggest the appropriate accounting treatment for recording the liability. Back-up your answer with reference to the appropriate recognition criteria and disclosure requirements for liabilities, as per AASB 137. a)A manufacturing company is being sued by a customer group for losses sustained due to a faulty product design. The company’s lawyers feel the suit will likely succeed, but they cannot estimate the potential amount of damages that will be awarded. B)A resource company is obligated by municipal regulations to clean up the site of an active drilling operation in 10 years’ time when the resource has been fully extracted. The company is in its first year of operations and has no previous experience in cleaning up drilling sites C) A mining company has determined that it will cost approximately $10 million to restore a site that it previously mined

True or false: the new revenue recognition standard is aimed at a few industries and will not affect most companies

When it comes to a manufacturer who is negligently manufacture goods, a. only the consumer who purchased the goods and suffered harm may sue the manufacturer b. only the family members who suffer harm can sue the manufacturer c/ both the consumer and hir family members who suffer harm can sue the manufacture d. the family members cannot sue the manufacturer because there is no privity between them and the manufacturer e. none of the above