Reference no: EM133077081

Question - An oil entity is exploring oil off the shores of the Philippine Deep. The entity has employed all exploration experts from around the globe. Despite all efforts, a major oil spill occurred and grabbed the attention of the media. The legal counsel of the entity has advised that there is no law that would require the entity to pay for the oil spill. However, in its TV ad and promotional brochures, the entity has clearly stated that it is very conscious of its responsibilities toward the environment and make good for any losses resulting from its oil exploration activities. The policy has been widely published. As a matter of fact, the chief executive officer of the entity acknowledged this policy in press conference when media practitioners raised questions on the issue of oil spill. The best estimate for the cost to clean up the major oil spill amounts to P 250,000.00. How much provision is to be recorded by the entity?

A. P250,000

B. P0

C. P100,000

D. No answer text provided.