Question

A company faces a lawsuit for patent infringement. Legal advisors state a 55% probability of losing with damages of ₹50 crore, but range could be ₹40–₹70 crore. Settlement discussions ongoing. How should the company account at year-end?

A Disclose only, no provision because outcome uncertain.
B Provide ₹55 crore (probability-weighted).
C Provide best estimate within range (most likely amount or midpoint if no better estimate).
D Provide full ₹70 crore as prudent.
E Provide nothing until settlement concludes.
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