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As a result of its mining operations, Silver Lining Ltd has contaminated the land on which it operates. There is no legal requirement to clean

As a result of its mining operations, Silver Lining Ltd has contaminated the land on which it operates. There is no legal requirement to clean up the land, but Silver Lining Ltd has a long record of cleaning up land that it has contaminated. How should Silver Lining report the related costs in its financial statements?

recognise the best estimate of costs as a provision.

disclose in the notes, but do not recognise in the financial statements.

charge the costs directly to profit or loss in the period in which the economic outflows actually occur.

transfer the expected amount of the clean-up from retained earnings to a special reserve account in equity.

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