Exercise 5.13 MEASURING A RESTRUCTURING PROVISION Company T's directors decided on 3 May 2014 to restructure the company's operations as follows: Factory Z would be closed down and put on the market for sale. 100 employees working in factory 2 would be retrenched on 31 May 2014, and would be paid their accumulated entitlements plus 3 months' wages. The remaining 20 employees working in factory Z would be transferred to factory X, which would continue operating Five head-office staff would be retrenched on 30 June 2014, and would be paid their accumulated entitlements plus 3 months' wages. As at the end of Company T's reporting period, 30 June 2014, the following transactions and events had occurred: Factory Z was shut down on 31 May 2014. An offer of $4 million had been received for factory Z but there was no binding sales agreement. The 100 retrenched employees had left and their accumulated entitlements had been paid. However, an amount of $76 000, representing a portion of the 3 months' wages for the retrenched employees, had still not been paid CHAPTER 5 Provisions, contingent liabilities and contingent assets . Costs of $23 000 were expected to be incurred in transferring the 20 employees to their new work in factory X. The transfer is planned for 14 July 2014. . Four of the five head-office staff who have been retrenched have had their accumulated entitlements paid, including the 3 months' wages. However, one employee, Jerry Perry, remains in order to complete administrative tasks relating to the closure of factory Z and the transfer of staff to factory X. Jerry is expected to stay until 31 July 2014. His salary for July will be $4000 and his retrenchment package will be $13000, all of which will be paid on the day he leaves. He estimates that he would spend 60% of his time administering the closure of factory 2, 30% on administering the transfer of staff to factory X, and the remaining 10% on general administration. Required Calculate the amount of the restructuring provision recognised in Company T's financial statements as at 30 June 2014, in accordance with IAS 37