In 2005 waste from Flash Limited destroyed a section of Fletcher’s Land. Members of the community demonstrated, and the company restored the land at a cost of $525,000. In 2006 the same section of Fletcher’s Land was destroyed. The Fletcher’s Land Citizens Association submitted an estimate for $680,000 to restore the land. Flash Limited is refusing to pay indicating that Slow Limited, the other company in the community should pay 50% of the restoration costs. In 2005 Slow Limited refused to pay any of the restoration costs. Flash Limited year end is December 31 2006. Indicate the accounting treatment and the disclosure in the financial statements of Flash Limited. Support your answer with the relevant IFRS.
In 2005 waste from Flash Limited destroyed a section of Fletcher’s Land. Members of the community demonstrated, and the company restored the land at a cost of $525,000. In 2006 the same section of Fletcher’s Land was destroyed. The Fletcher’s Land Citizens Association submitted an estimate for $680,000 to restore the land. Flash Limited is refusing to pay indicating that Slow Limited, the other company in the community should pay 50% of the restoration costs. In 2005 Slow Limited refused to pay any of the restoration costs. Flash Limited year end is December 31 2006.
Indicate the accounting treatment and the disclosure in the financial statements of Flash Limited. Support your answer with the relevant IFRS.
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