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An entity that reports using IFRS determines it has an onerous contract. How should the...

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Question

Accounting

An entity that reports using IFRS determines it has an onerous contract. How should the onerous contract be measured at initial recognition?

Question 11 options:

a)

As an asset, recorded at the penalty amount that would be received for cancelling the contract.

b)

There is no requirement to record an onerous contract.

c)

As a provision, equal to the net cost of fulfilling the contract.

d)

As a provision, at the lower of the net cost of fulfilling the contract and the penalty for not fulfilling the contract.

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