Galamsey LTD has successfully acquired a license to mine in a 10,000-acre concession at the village of Franciskrom. Under the terms of the license, Galamsay is expected to restore the excavated land back to arable position when they have exhausted mining their concession. The cost of the land restoration has been estimated to be $5M to be incurred at the end of 4 year mining operations. The current discount rate is given as 10%. Assuming Galamsey limited started operating on 01/01/2020, show how the provision will be accounted for in the financial statements of the company. Note: Show Income statement and SOFP extract for the years 2020 through to 31/12/2023.

Answer rating: 100% (QA)

Galamsey LTD Financial Statements with Reclamation Provision 20202023 Assumptions License acquired a... View the full answer