What is required for the ongoing measurement of a decommissioning provision?

The ongoing measurement of a decommissioning provision requires that the calculation be updated at each reporting period. This is because decommissioning provisions are based on estimates of future costs associated with dismantling and removing an asset, and these estimates can change over time due to various factors such as inflation, changes in regulations, technological advancements, or new information about the asset itself.

Updating the calculation ensures that the provision reflects the most current and accurate information available, thereby providing a more reliable picture of the financial obligations associated with asset decommissioning. This practice aligns with the principles of accounting, ensuring that provisions are recognized consistently and accurately in financial statements.

In contrast, ignoring the provision until the asset is disposed would misrepresent the obligations during the asset's life. Failing to reassess the obligation annually might lead to a misstatement of financial liabilities, and keeping the original estimate unchanged does not accommodate potential changes in circumstances or new data, which could result in significant underestimations or overestimations of future costs. Thus, regular updates in calculations are essential for maintaining the integrity and accuracy of financial reporting.