Lily Smith (Lily) is the financial accountant for Home Equipment Limited (HE Limited), a garden equipment manufacturer that has its head office in Wellington, New Zealand, and operations in New Zealand, Australia, and Canada. HE Limiteds financial statements are prepared in accordance with New Zealand Equivalents to International Financial Reporting Standards. During the preparation of HE Limiteds financial statements for the year ended 30 June 2021, Lily considers this:

Lily is aware that the board of HE Limited has approved a restructuring plan for its operation in Canada, which involves shutting down the plant facility for two years while major renovations are completed. The estimated costs of the plan are $25 million. However, the board has not announced the plan publicly.

Determine how Lily would account for this item in HE Limiteds financial statements for the year ended 30 June 2021. Justify your response with specific references to NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets.