provision

Current liabilitie
Provision for plant overhaul (note (iv)) 12,000

None of the non-current assets have been depreciated for the current year. The freehold property should be
depreciated at 2% on its cost of $130 million, the leased plant is depreciated at 25% per annum on a straight
line basis and the sundry plant is depreciated at 20% on the reducing balance basis. The heavy excavating
plant is being depreciated over 6 years on a straight line basis.
Plant is split as follows:
$’000
Heavy excavating plant 40,000
Sundry plant 70,000
110,000

Tintagel operates some heavy excavating plant which requires a major overhaul every three years. The
overhaul is estimated to cost $18 million and is due to be carried out in April 20X5. The provision of $12
million represents two annual amounts of $6 million made in the years to 31 March 20X3 and 20X4.
This plant was purchased for $60m on 1 April 20X2 and is being depreciated over 6 years on the straight
line basis.

Commencing with the retained earnings figures in the above statement of financial position ($52·5 million
and $47·5 million), prepare a schedule of adjustments required to these figures taking into account any
adjustments required by notes

sir can you give key word how to find there a present obligation where to provide provision or not in this case and generally also

i am finding difficulty in finding whether to provide provision or not

thank you in advance sir