2.3 This question has 3 separate elements, parts a), b) and c). They are not related to each other and should be answered independently of each other. a) A valuable vein of gold has been found in the land beneath Holmbridge County Park. Single plc has purchased the county park and will extract the gold. It is estimated that it will take 5 years to extract all of the gold. The cost of reinstating the park and returning it to its former state is estimated to be 15m. There is no legal requirement to reinstate the land to its former condition, but Single Plc has an environmental policy that states that they will reinstate the land to its former state. Single plc has previously been prosecuted and fined for environmental damage. Required: Explain the relevant accounting treatment to Single plc, under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. (5 marks) b) IFRS 15 Revenue from Contracts with Customers identifies 5 steps for revenue recognition. Bifone plc provided a 12 month pay monthly contract for mobile phones. The terms of the contract are that a handset with a market value of 400 is provided free and a monthly fee of 200, which includes unlimited minutes, is charged on the first day of the month. A similar plan, without a handset is charged at 175 per month. Required: Explain, with supporting calculations, how Bifone should apply the 5 steps for revenue recognition to this transaction. (7 marks) c) Mondeo acquired 80% of the equity of Skoda on 1st April 20X5. The profit after tax for both companies for the period ending 31 December 20X6 are as follows: Profit after tax Mondeo '000 58,000 Skoda '000 19,500 On acquisition, the fair value of Skoda's non-current assets were 45,000 in excess of their book values. The remaining life of these assets was 5 years. Mondeo has made sales of 65,000 to Skoda since it was acquired. None of these remain in Skoda's inventory at 31 December 20X6. Impairment of goodwill was calculated to be 2,000