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Hi,
Can you please explain to me this note no.3 on the negligence claim.
I don’t understand at all what it wants.
in june 2009 coaltown made an out of court settlement of claim by former emloyee. Dispute in progress for 2 yr and co had made provisions for the potential liability in eah of the 2 previous years. The unprovided amount of the claim at the time of settlement was $30,000 and this was charged to operating expense.
in sofp given value
2009: nil
2008: 120answer in socf 120 deducted.
Q: why deduct
Q2: why 120
Q3: what happen to 30KHi,
If the opening value was 120 and the closing value was nil then there has been a reduction in the liability due to the payment and hence an outflow/deduction.
The 30 has also been paid, but as this has been included within the operating expenses this has already been deducted through PBT and is therefore already included within the SCF.
Thanks
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