Problem: One of RCQ's customers started a legal claim against the company on 21 October 20X8. On 3 January 20X9 the courts awarded damages to the customer of R$60,000. RCQ's year-end was 30 September 20X8 but the financial statements were not authorised for issue until 6 January 20X9. The damages awarded are not regarded as material. Which of the following is the correct treatment in relation to the court's decision in the financial statements for the year ended 30 September 20X8? Solution A. Recognise a liability for R$60,000. B. Disclose the court award of R$60,000 in the notes to the financial statements. C. State in the notes that an estimate of its financial effect cannot be made. D. Do nothing.