a customer files a suit claiming damages of sek10 million from faulty engines that s 566875

A customer files a suit claiming damages of SEK10 million from faulty engines that Scania manufactured. The case has not yet gone to trial, so no court has yet rendered a decision or verdict. Firms do not recognize unsettled lawsuits as liabilities unless the firm judges that it will probably lose, and the loss estimate satisfies some other conditions. If the firm judges the eventual loss to be less than probable or if it judges the loss to be probable but it cannot estimate the amount of any payment within a range, it will not recognize a liability. That is, unless it is probable that Scania will have to pay and Scania can estimate the amount of payment, then it will not record a liability for the lawsuit. Scania will disclose in notes to its financial statements the existence of the lawsuit (if it is material) and the potential for future payments.