Melville Ltd Received a Material Claim for Damages from a Customer

Multiple Choice

Melville Ltd received a material claim for damages from a customer for not delivering ordered goods on time.The customer insists that Melville Ltd's late delivery resulted in significant losses to the customer.Melville Ltd admits to the delay but disputes the material damages being claimed.What is the appropriate accounting treatment for the claim that is in accordance with AASB 137?

A) Ignore the claim.
B) Recognise the minimum amount of the liability.
C) Recognise the maximum amount of the liability.
D) Recognise the best estimate of the liability.