Hillman Ltd prepares financial statements to 31 March each year. Consider each of the following situations and determine in each case whether or not a provision should be accounted for in the company’s financial statements for the year ended 31 March 2010. 

(a) On 23 January 2010, the board of directors decided to close down one of the company’s operations. By 31 March 2010, this decision had been announced to the workforce and a detailed plan had been drawn up for its implementation. The closure would involve redundancy payments of EUR 750,000. 

(b) On 12 March 2010, the directors decided to close down another of the company’s operations. This would involve redundancy payments of EUR 500,000. At 31 March 2010, the decision had not been announced and had not-yet been acted upon. 

(c) For the past few years, the company has been conducting two operations which cause environmental damage. One of these operations is in a country which by law requires companies to rectify any environmental damage which they cause. The other is in a country which has no such legislation. The costs of rectifying the damage caused to date by these two operations are estimated at EUR 10m and EUR 20m respectively. 

(d) At 31 March 2010, the company owns a fleet of motor lorries, all of which require an annual service. This servicing work is expected to be performed during the year to 31 March 2011, at an estimated cost of EUR 100,000.