Answer
Not acceptable.
Work Step by Step
An arrangement for the conceivable misfortune/loss can be made through an appropriation of retained earnings yet the point when judgment has been rendered on the suit; until it is otherwise settled, entry of the misfortune represents typical anticipation. Recording it prior is presumably unwise legally as well. For the misfortune to be recognized at this point, the misfortune would have to be plausible and sensibly estimable. It is also important to note that disclosure is required if the misfortune isn't recorded.
