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Topic: Provisions and Contingent Liabilities
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+ past questions and counting.
- 5 Marks
FR – Mar/Jul 2020 – L2 – Q2c – Disclosure Requirements of IAS 37
Outline the disclosure requirements for provisions as per IAS 37.
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- Tags: Contingent Liabilities, Disclosure Requirements, Financial Reporting, IAS 37, Provisions
- Level: Level 2
- Topic: Provisions and Contingent Liabilities
- Series: MAR/JULY 2020
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- 3 Marks
FR – Nov 2023 – L2 – Q2d – Financial Reporting Standards and Their Applications
Explain the financial reporting treatment of decommissioning costs in the financial statements of Taini Ltd under IAS 37.
Question
Taini Ltd (Taini) is a listed mining company that operates in the Bono Region with a ten-year term concession commencing on 1 April 2022. After the expiry of the current mining term, Taini has a duty to rehabilitate the area. These rehabilitations are anticipated to cost GH¢12.09 million on April 1, 2032. On April 1, 2022, the present value of the restoration cost was calculated using the company’s 8% cost of capital at GH¢5.6 million.
Required:
In accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets, explain the financial reporting treatment of the above transaction in the financial statements of Taini Ltd for the year ended 31 March 2023.
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- 5 Marks
FR – Mar/Jul 2020 – L2 – Q2c – Disclosure Requirements of IAS 37
Outline the disclosure requirements for provisions as per IAS 37.
Find Related Questions by Tags, levels, etc.
- Tags: Contingent Liabilities, Disclosure Requirements, Financial Reporting, IAS 37, Provisions
- Level: Level 2
- Topic: Provisions and Contingent Liabilities
- Series: MAR/JULY 2020
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- 3 Marks
FR – Nov 2023 – L2 – Q2d – Financial Reporting Standards and Their Applications
Explain the financial reporting treatment of decommissioning costs in the financial statements of Taini Ltd under IAS 37.
Question
Taini Ltd (Taini) is a listed mining company that operates in the Bono Region with a ten-year term concession commencing on 1 April 2022. After the expiry of the current mining term, Taini has a duty to rehabilitate the area. These rehabilitations are anticipated to cost GH¢12.09 million on April 1, 2032. On April 1, 2022, the present value of the restoration cost was calculated using the company’s 8% cost of capital at GH¢5.6 million.
Required:
In accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets, explain the financial reporting treatment of the above transaction in the financial statements of Taini Ltd for the year ended 31 March 2023.
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