Kerlane has a dismantling obligation for which no quoted price exists and which no third party holds as an asset. A participant who would assume the obligation would bear an expected outflow of 1,331,000 in 3 years; the discount rate it would use, including its risk compensation margin, is 10% (case data). Compute the fair value of the liability using present value.
- Expected outflow
- 1,331,000
- Years before the outflow
- 3
- Discount rate including the margin
- 10 %