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Forums › ACCA Forums › ACCA SBR Strategic Business Reporting Forums › PROVISIONS
what is decommisioning or abandonment cost with reference to IAS 37 ?
Decommissioning ( in the context of, for example, a nuclear power plant ) is where you have to break down / demolish the asset at the end of its life.
Abandonment is literally that – walking away from the asset.
oh thankyou but why do we want to make a provision for it?
If we are OBLIGED to decommission – either contractually, legally or even constructively – the it’s an obligation which needs to be recognised. That’s why we provide
ok thanku 🙂