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In the calculation of decommissioning cost where it s comprises 80% cost relate to removal and 20% relate to rectification of. damage caused through the extraction of natural gas.(oil extraction has commenced a year ago)
(Accounting treatment) in this case either the cost relate to rectification related to the extraction of gas would be included in the cost or not?
Secondly,provision would be recognised or not?yes both cost r capitalise together with the nca if there is any. Also the decomissioning cost must be brought down to its present value and you will have to unwind the interest every year so that in x number of years when u will have to pay the actual decomissioning cost the present value + the accumulated interest will be equal to the agreed amount of the decommissioning cost /
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