CERTYNEX IFRS ACADEMY

A new regulation requires Brisaco to fit its paint shop with a soundproofing system by 20X7 if it wants to keep operating it. At the 20X5 reporting date, nothing has been installed. Should Brisaco recognise a provision for the cost of the installation?

Yes, because the regulation has already been adopted.

Yes, for the discounted cost of the system to be installed in 20X7.

No, because Brisaco can avoid the expenditure by its future actions, for example by ceasing to operate the shop.

No, because the amount of the installation is not yet known precisely.