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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Present value for end of life cost
Sir, just say if the present value to decommission and restore a gold mine at the end of a 15 year mine life is $1,000,000.
Initial entries are:
Dr PPE $1,000,000
Cr Liability (end of life cost) $1,000,000
Over each of these 15 years and as at each balance sheet date, any changes in the future liability, are these changes reported in P & L,
i.e,
Dr or Cr P & L with change
Dr or Cr with change in liab
or is this accounted for otherwise? Please confirm if correct.
Hi,
That is correct, we would DR P/L CR Provision. The expense recognised is through finance costs.
Thanks