Epsilon is an entity which prepares financial statements to 30 September each year.

(b) Decommissioning
On 31 March 2023, Epsilon will be legally required to decommission the machine using the original supplier. The directors of Epsilon estimate that the cost of safely decommissioning the machine on 31 March 2023 will be 3 million francs.

Note: A relevant annual rate to be used in any discounting calculations is 8% and the appropriate discount factor is 0·681. (8 marks)

Required:
Explain and show with appropriate calculations how the above events would be reported in the financial statements of Epsilon for the year ended 30 September 2018. Marks will be awarded for BOTH figures AND explanations.