RE:RE:RE:Q3 Financials out on SEDARHi Dan,apologies, I made a couple errors. First, I had a misunderstanding. I thought Karnalyte was using the price they'd pay now as a proxy for the PV of decommissioning the asset, which appears was incorrect. The accounting standard (IAS 37 if you are curious) asks for the present value of that estimated cost, which appears is what Karnalyte did, they did not use a proxy. Then it gets revalued periodically and in slightly different fashion depending on method chosen, and Karnalyte's treatment appears, at least at first glance, consistent with those accounting requirements.
However, secondly and much more importantly, I reviewed the standard & applied it to this situation, and it turns out the provision for the decommissioning liability is actually NOT in accordance with IAS 37 aka there should be no provision at all for decommissioning costs. To keep it short, this liability needs to be recorded when the installations that would need to be decommissioned have been completed.
The official language of the criterion it doesn't meet is "Present obligation resulting from a past event". In this case, the obligation is the decommissioning, and the event is building the infrastructure that will be decommissioned. In other words, if there's nothing to decommission, then you don't owe anything for decommissioning (logical, right?).