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Forums › ACCA Forums › ACCA FR Financial Reporting Forums › Inpairment of assets – costs of restoration
An oil exploration company has an obligation to restore the mining site after ceasing operation. The cost of restoration recognised is $5million. The CA of the mine is $14million.
The FV less cost of disposal is $11million with the buyer assuming the liability to restore the site in future.
VIU is $13million which excludes the restoration costs.
Calculate the RA of the mining site.
Why do we need to deduct restoration costs from CA when calculating impairment loss?
You surely be having an answer for this question, isn’t it? What is the CA as per the solution?