In 2018 waste from Beef Limited destroyed a section of Suffers Heights. Members of the community demonstrated, and the company (Beef Limited) restored the land at a cost of $830,000. In 2019 another section of Suffers Heights was destroyed. The Suffers Heights Citizens Association submitted an estimate for $550,000 to restore the land. Beef Limited is refusing to pay, indicating that the other three companies in the community should pay 75% of the restoration costs. In 2018 the other three companies had refused to pay any of the restoration costs.

Beef Limited year end is December 31,2019. Required:

Explain the accounting treatment in the books of Beef Limited for the $550,000 estimate submitted by Suffers Heights Citizens Association for the financial year ended December 31, 2019. Support your answer with the relevant IFRS.

Quest