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| On May 1, year 2, Winston Corporation received notification of legal action against the firm. Winston’s attorneys determine that it is probable the company will lose the suit, and the loss is estimated at $5,000,000. Winston’s accountants believe this amount is material and should be disclosed. Winston prepares its financial statements in accordance with IFRS. How should the estimated loss be disclosed in Winston’s financial statements at December 31, year 2? A. As a provision for loss reported in the balance sheet and a loss on the income statement. B. As a loss recorded in other comprehensive income. C. In the footnotes to the financial statements as a contingency. D. As a contingent liability reported in the balance sheet and a loss on the income statement. |