On 1 July 2020, Entity A opened a chemical plant. The plant was due to be active for five years until 30 June 2025, when it would be decommissioned.

On 1 July 2020, the costs of decommissioning the plant were estimated to be $4,000,000 in 5 years time. Entity A considers that a discount rate of 12.03% is appropriate for the calculation of a present value.

REQUIRED:

Evaluate the expenses charged to the Statement of Profit or Loss in respect of the costs of decommissioning for the year ended 30 Jun 2023.