According to IAS 37, with respect to onerous contracts, a provision should be recognized for unavoidable costs of the contract, which is defined as:
A. the intrinsic value of the contract.
B. the lower of cost or market value of the contract.
C. the lower of cost of fulfillment or the penalty from non-fulfillment of the contract.
D. none of the above.
Answer:C
According to IAS 37, with respect to onerous contracts, a provision should be recognized for unavoidable costs of the contract, which is defined as:
A. the intrinsic value of the contract. B. the lower of cost or market value of the contract. C. the lower of cost of fulfillment or the penalty from non-fulfillment of the contract. D. none of the above.