The Notes in the BG Group 2007 Annual Report included the following extract:

Decommissioning 2007 2006 £m £m As at 1 January 311 260 Unwinding of discount 16 13

Decommissioning costs The estimated cost of decommissioning at the end of the producing lives of fields is reviewed at least annually and engineering estimates and reports are updated periodically. Provision is made for the estimated cost of decommissioning at the statement of financial position date, to the extent that current circumstances indicate BG Group will ultimately bear this cost.
Explain why the provision has been increased in 2006 and 2007 by the unwinding of discount and why these increases are for different amounts.

Transcribed Image Text:

Provisions for liabilities and charges Decommissioning 2007 2006 Em Em As at | January Unwinding of discount 311 2601 16 13