Capitalised provision

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February 23, 2023 at 12:29 pm #679491
MrPersonable
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If a provision(at its present value of future cash flows) is capitalised and added to an asset, will it still need to unwinded every year until mature in the P/L
February 26, 2023 at 7:47 pm #679648
P2-D2
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Yes, we unwind it every year by applying the interest rate to the provision. The aim being to grow the provision to the amount it is expected to be settled at.

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