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What is the total charge to the statement of profit

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Reference no: EM132979414

Question - On 1 July 2020, a company opened a chemical reprocessing plant. The plant was due to be active for four years until 30 June 2024, when it would be decommissioned.

At 1 July 2020, the costs of decommissioning the plant were estimated to be P8 million in 4 years. The company considers that a discount rate of 12% is appropriate for the calculation of a present value.

What is the total charge to the statement of profit or loss in respect of the decommissioning for the year ended 30 June 2021? Round present value factor to 4 decimal points.

Reference no: EM132979414

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