What amount should be booked as adjustment

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Question: On December 25, 2019, ABC Oil and Tech, Inc. thorough its monitoring team reported an oil spill happened in the Gulf of Buyacaoan. The news spread fast to all reporting agencies causing the stock price to decline from P100 to P70. The estimated cost of the damage to biodiversity is P5,000,000 and the legal counsel of the firm expected that they will likely win at 40% rate. They booked the estimated cost at full. The reporting period ends December 31, 2019 and the financial statements were approved for issue on March 31, 2020. On February 20, 2020, lawyers expected not to win at 40% rate with new information acquired by a team of experts hired by the company. What amount should be booked as adjustment to the loss of the company?

Reference no: EM132752358

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