CERTYNEX IFRS ACADEMY

While waiting for construction of its future warehouse to begin, an entity rents out the bare site as a car park for six months. It collects receipts and incurs security costs. How should this income and these expenses be accounted for?

The receipts net of costs are deducted from the cost of the warehouse.

The car park income and expenses are recognised in profit or loss, in their respective line items.

The security costs are added to the cost of the warehouse and the receipts go to profit or loss.

The car park's net result is deferred as a liability until the warehouse is brought into use.