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    Question

    According to Ind AS 16, if the cost of dismantling a

    plant in future is ₹5 lakh, and there's a present obligation, how should this be treated?
    A Ignore it unless paid Correct Answer Incorrect Answer
    B Disclose in notes only Correct Answer Incorrect Answer
    C Add to asset cost and create a provision Correct Answer Incorrect Answer
    D Charge to P&L immediately Correct Answer Incorrect Answer

    Solution

    If there's a present obligation and dismantling is part of asset use, the estimated cost is capitalized and a provision is created under Ind AS 16.

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