On January 1, 2019, Minas Company purchased a mining site in the mountains for the extraction of
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Question:
On January 1, 2019, Minas Company purchased a mining site in the mountains for the extraction of minerals. The site costed P12,500,000. Having no residual value, the mining site was annually depreciated by P1,539,500 throughout its useful life of 10 years. The local government unit requires the company to incur rehabilitation costs at the end of the mining operation. On December 31, 2028, it paid P6,450,000 to settle the decommissioning liability. The applicable discount rate is 8%.
How much is the gain/loss on the settlement of the decommissioning liability? [Indicate whether it is a gain or loss]
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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