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    Question

    A company purchases machinery for ₹10 lakh. Estimated

    dismantling cost after 5 years is ₹1 lakh. The dismantling obligation is present as per contract. What should be the cost of asset as per Ind AS 16?
    A ₹10 lakh Correct Answer Incorrect Answer
    B ₹9 lakh Correct Answer Incorrect Answer
    C ₹11 lakh Correct Answer Incorrect Answer
    D ₹10.5 lakh Correct Answer Incorrect Answer

    Solution

    Ind AS 16 requires that if a present obligation exists to dismantle an asset in the future, the estimated dismantling cost must be added to the cost of the asset and provided as a liability at present value.

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