At the end of 20X5, Dorvalis brings into service a water treatment plant built on concession land. The concession requires the installations to be removed and the land returned in 8 years; the cost, estimated at 1,200,000, is discounted at the pre-tax rate of 3%. The IAS 16 criteria for including this initial estimate in the cost of the plant are met (case data). Record the provision when it is set up (amount rounded to the nearest unit).
- Expected removal cost
- 1,200,000
- Pre-tax rate (%)
- 3 %
- Years until removal
- 8