Liabilities The following items occurred in Sarah Ltd for the year ended 30 June 2026.

(a) Some of Sarah Ltd’s plant and equipment is situated in an area which, on average, is flooded every 15 years. The company has no flood insurance, but provides an amount each year as a liability in the accounts for uninsured flood losses.

(b) Sarah Ltd entered into a contract with Valley Ltd to acquire some plant and equip¬ment at a cost of $1 000 000. At the end of the reporting period, Sarah Ltd had paid a 10% deposit.

(c) Sarah Ltd has a regular program of maintenance for its plant and equipment. In order to provide for this program, the company has been in the habit of establishing a Provision for Plant Maintenance account and disclosing it as part of liabilities.

Required

Discuss how the items should be treated in the general purpose financial reports of Sarah Ltd if the company were to comply with the provisions of the Conceptual Framework. Ignore GST.