On March 1, 2020, Petroleum Inc. installed underground storage tanks. The tanks have a useful...
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On March 1, 2020, Petroleum Inc. installed underground storage tanks. The tanks have a useful life of 15 years, at the end of which Petroleum must remediate the site back to its original condition. The cost to purchase and install the storage tanks was $5,000,000, and the decommissioning cost is expected to be $650,000. The discount rate for this obligation is 4%. Petroleum uses the straight-line method of depreciation prorated based on number of months in use, and the tanks are expected to have a residual value of $200,000. Assuming that Petroleum reports under IFRS, what is the amount of depreciation related to the storage tanks for the year ended December 31, 2020?
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