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On 1st april 2012, the govt. introduces a legislation which had the effect of requiring Shawler to fit anti-pollution filter to its furnace in 2 yrs.Whether shawler need to provide provision for cost of the filter on Sep 2012.
Now we know it is a future obligation cause the effect is not binding until 2 yrs has elapsed. and also shawler can avoid it by selling of that business. So no need to create the provision.
My question is what after the 2 yr has elapsed and shawler hasnt yet fitted the filter. That time will we create a provision with the cost of filter?
answer says if then also no need of provision why is it so?
isnt that after 2 years gone…its an obligation now for the company to fit the filter as per govt. policy….still answer says no need of provision for filter.
Hi,
We do not provide for the cost of fitting the new filters as they have not been fitted. The fitting of the filters is what would give the obligation. We do have to provide for the fines.
Thanks
can u plz elaborate…i didnt got it….i mean to say when there is a govt. policy for which they need to fit the filter……once 2yrs has passed isnt that will become an obligation for the company now that they have to fit the filter….once its a obligation and still they havent fit it…then we need to provide for provision right for the filter. what is the reason behind not providing for it. is it because they can sell of the business n overcome the obligation….only they neeed to provide for the penalty….
Hi,
If we haven’t fitted the filters when there is a law in place then we are breaking the law and provide for the fines attached due to not fitting the filters. We are not fitting the new smoke filters and so there is no obligation and therefore we do not provide for these costs.
Thanks
Why do we not fitting the smoke filter when there is a law in place? Isn’t it a MUST for is to fit the filter?
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