Grant Company has had a record-breaking year in terms of growth in sales and profitability. However, market research indicates that it will experience operating losses in two of its major businesses...

Grant Company has had a record-breaking year in terms
of growth in sales and profitability. However, market
research indicates that it will experience operating losses
in two of its major businesses next year. The controller
has proposed that the company record a provision for
these future losses this year, since it can afford to take the
charge and still show good results. Advise the controller
on the appropriateness of this charge.