The following items occurred in Mitcham Ltd for the year ended 30 June 2020.

(a) Some of Mitcham Ltd’s plant and equipment is situated in an area that, on average, is flooded every 15 years. The company has no flood insurance, but provides an amount each year as a liability in the accounts for uninsured flood losses.

(b) Mitcham Ltd entered into a contract with Blackburn Ltd to acquire some plant and equipment at a cost of $1 000 000. At the end of the reporting period, Mitcham Ltd had paid a 10%
deposit.

(c) Mitcham Ltd has a regular program of maintenance for its plant and equipment. In order to provide for this program, the company has been in the habit of establishing a Provision for Plant Maintenance account and disclosing it as part of liabilities.

Required

Discuss how the above items should be treated in the general purpose financial reports of Mitcham Ltd if the company were to comply with the provisions of the Conceptual Framework. Ignore GST