at a cost of 6. Ryan constructed an ecologically-efficient power station M1,000 million and began production on I January x4. Its economic life tored is 20 years. The power station has to be dismantled and the site res to its original condition at the end of its economic life. Ryan esti on 31 December x4 that the present value of the dismantling cost will he RM150 million (using a discount rate of 5%). Ninety-five percent of these costs relate to the removal of the power station and five percent relates to damage caused through generating energy sale agreement, oil has to be supplied to the company's former holding company at an uneconomic rate for five years. The loss estimated to sustained over the five years is RM270 million. At the same ti be me, XY is exposed to environmental liabilities arising out of its past obligations mainly due to soil erosion though currently there is no legal obligation to carry out any restoration work. Ryan has a reputation for ensuring the preservation of the environment and has estimated and decided to provide for RM100 million in respect of the environmental liability Required: have been incurred and/or will be incurred. Advise the directors on the accounting treatment of the various costs that hpvwe ben incured and/or wll be incurred