Cobalt Ridge announces a net-zero-by-2040 target and publicly commits to restore two mine sites its licences do not cover. Under IFRS, which of these gives rise to a provision on announcement?

Answer

The site-restoration commitment only, as a constructive obligation

Options - A. The site-restoration commitment only, as a constructive obligation - B. Both the net-zero target and the site-restoration commitment, as constructive obligations - C. The net-zero target only, at the estimated cost of the reductions needed to reach it - D. Neither — voluntary commitments are disclosed in the notes and never recognised Why - A. Correct — the public promise to restore specific sites creates a valid expectation and a present obligation; the emissions target is a plan for future operations, not an obligation to a third party. - B. A target to reduce future emissions is not a present obligation arising from a past event; no provision is recognised for the cost of reaching it. - C. Reversed — the target creates no obligation; the site promise does. - D. A voluntary commitment that creates a valid expectation IS a constructive obligation under IAS 37 and is recognised.

Synthesis of L3.3, L6.6, L6.7; IFRS S2 (ifrs.org; CSSB In-Brief 20 May 2026 — verified-facts 2.4-b)