CERTYNEX IFRS ACADEMY

On 30 December 20X5, the management of Fresnelle approves a plan to cut head office staff by 15%. The plan remains confidential until its announcement planned for March 20X6 and no measure has been started. The accountant recognises a restructuring provision of 1,100,000 at 31 December 20X5. What is the error?

The amount should have been discounted, as departures are spread over the whole of 20X6.

The provision should have been presented as an employee-related payable.

No obligation exists at the reporting date: the plan was neither started nor announced.

Only half of the amount should have been provided for.