. MegaBux Co is a multinational holding company. During the year a number of situations have arisen and the board is to meet soon to determine an appropriate treatment.

Site A

This site is occupied by a small refinery. The site and some adjacent land has been contaminated by chemical spillages. The cost of remedying the contamination is GHS20m, but under local laws there is no requirement to clean up the site.

Site B

Similar contamination has arisen but the local government, and a neighbouring land owner, require the contamination to be remedied soon. The cost of cleaning up the site is GHS15m, but an extra GHS5m could be spent to raise the standard of the operation in line with undertakings given to the local community ten years ago.

Site C

Considerable contamination needs to be remedied, but the managing director is arguing that no provision is required this year since the amount concerned cannot be estimated with accuracy.

Site D

Spillage of chemicals has reduced the value of the site from GHS25m, its book value, to GHS10m, its current realisable value. By spending GHS5m on rectification, the site value will be increased to GHS20m. The spillage has seeped into a local river and fines of GHS3m are now payable.

Required:

Determine the appropriate treatment for each of the situations above.