oys Pty Ltd is currently under investigation for providing defective products to their customers. If found guilty, Toys Pty Ltd may be required to compensate their customers for approximately $850 000. The court case is still pending and the outcome will not be known until later in the next financial year. For the current financial year, the amount of $850 000 will be:
a. disclosed in the notes to the financial statements as a contingent liability.
b. recognised in the statement of financial position as an asset.
c. recognised in the statement of financial position as a liability.
d. recognised in the statement of financial position as a contingent liability.