Provision

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February 12, 2020 at 10:02 am #561462
toushiga
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Hello Sir , under BPP workbook(ver 19) appendix 2 -supplementary reading for chapter 3 Non-current asset, Activity 4: Self -constructed asset
Why the Demolition cost recognised as a provision is $920,000 , how it was be calculated?
Thank you.
February 12, 2020 at 8:13 pm #561554
Stephen Widberg
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In the 19/20 workbook NCA are in chapter 4 and they took out a lot of examples – so it’s gone.
But what I can say is that, if there is a legal or constructive obligation to demolish an asset, then you should recognise the provision and discount it to present value.
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