CERTYNEX IFRS ACADEMY

Local residents are suing Gavrelle, which they accuse of causing cracks in their houses during works. The appointed experts conclude that it is more likely than not that the cracks come from natural ground movement; a risk of an adverse ruling remains, without being remote. What does Gavrelle conclude at the reporting date?

A provision for all the repairs claimed, out of prudence.

Neither a provision nor disclosure, the experts having ruled out its liability.

No provision, but disclosure of a contingent liability.

A provision equal to half the repairs, the risk being shared.