Pradane and two other manufacturers jointly polluted a river; they are jointly and severally liable for the clean-up, estimated at 900,000. The two other manufacturers are solvent and Pradane expects to bear 40% of the cost, in line with their sharing agreement. Compute the amount Pradane recognises as a provision and the amount treated as a contingent liability.
- Total clean-up cost
- 900,000
- Share Pradane expects to bear (%)
- 40 %