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Clean prepares its financial statements in accordance with International Accounting Standards. On 25 June 2020, Clean made a public announcement of a decision to reduce
Clean prepares its financial statements in accordance with International Accounting Standards. On 25 June 2020, Clean made a public announcement of a decision to reduce the level of emissions of harmful chemicals from its factories. The directors formulated the proposals for emission reduction following agreement in principle earlier in the year. The entity has a reputation of fulfilling its financial commitments after it has publicly announced them. Clean included a provision for the expected costs of its proposal in its financial statements for the year ended 30 June 2020. Required: Explain the decision of the directors of Clean to recognise the provision in the statement of financial position at 30 June 2020
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