Candel

Adj # (iii) Candel is being sued by a customer for $2 million for breach of contract over a cancelled order. Candel has obtained legal opinion that there is a 20% chance that Candel will lose the case. Accordingly Candel has provided $400,000 ($2 million × 20%) included in administrative expenses in respect of the claim. The unrecoverable legal costs of defending the action are estimated at $100,000. These have not been provided for as the legal action will not go to court until next year. -> Admin decrease by 400 ; i have understood Trade payables and provisions decrease 400 ; i have a confusion provision decrease by 400 means 400 was included in provision, if so i can understand. but if i assume that 400 was not included in provision in the question. if i assume only 400 was included in Admin exp. but not in provision then i need to decrease only admin exp by 400 but not provision as the amount is not included in provision. pls help sir.