Required Determine the fair value of the decommissioning liability at 1 July 2022 using the present value technique.

3.11 Present value technique: decommissioning liability LO4 On 1 July 2022, Panda Ltd assumed a decommissioning liability in a business combination. The entity is legally required to dismantle and remove an offshore oil platform at the end of its useful life, which is estimated to be 10 years. If Panda Ltd were contractually allowed to transfer its decommissioning liability to a market participant, Panda Ltd considers that the market participant would need to take into account the following inputs. Expected labour costs: $152 500 Allocation of overhead costs: $115 000 Contractor's profit margin: 20% of total labour and overhead costs Inflation factor: 4% p.a. for 10 years Market risk premium paid for undertaking risks involved: 5% Time value of money, represented by the risk-free rate: 5% Non-performance risk including Panda Ltd's own credit risk: 3.5%