1. The following information relates to the operations of Platinum Ltd, a mining company, for the year ended 31 December 2017: 1. Platinum Ltd damaged the environment when it commenced mining operations on 1 January 2017.It is estimated that this damage will cost N$5 000 000 to repair at the end of the mining operations on 31 December 2027. At 31 December 2017 a discount rate of 15% before tax was considered to be appropriate. Environmental legislation requires that damage to the environment must be repaired at the end of the mining operation.

2. Under new legislation, the company is required to fit filters on all its heavy equipment before 30 April 2018. On 31 December 2017 the company has not yet done so but have budgeted an amount of N$200 000 for the fitting of the filters.

3. On 12 December 2017 the board of directors decided to close down a division during 2018. They made an announcement on 20 December 2017 in the press concerning their decision and released a formal business plan. Some of this division's personnel will leave the services of Platinum Ltd on 31 March 2018, for which they will receive ex-gratia payments amounting to N$600 000 in total. Other personnel will be relocated to other divisions, which will cost the company N$120 000in re-establishment costs.

Required

(a) Prepare the journal entries, where applicable, to account for the above transactions in the records of Platinum Ltd for the year ended 31 December 2017. As above, number your journal entries 1 to 3. Explain very briefly, in case you do not recognize a provision for a particular amount

(b) Disclose the above information in an extract of the statement of financial position and prepare the notes relating to provisions in the financial statements of Platinum Ltd for the year ended 31 December 2017. The solution must comply with the requirements of International Financial Reporting Standards (IFRS).

Answer rating: 100% (QA)

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