CERTYNEX IFRS ACADEMY

In 20X1, the building materials merchant Bâtir Solenne sells to its customers bricks with a carrying amount of €60,000, the related revenue being recognised in 20X1 (given). It also uses bricks from its inventory, with a carrying amount of €45,000, to build its new head office, which it will occupy itself and account for as property, plant and equipment. Which treatment should be applied for 20X1?

An expense of €105,000 in 20X1: €60,000 of cost of sales and €45,000 for the bricks used on the building site.

Cost of sales of €60,000 in 20X1; the site bricks, €45,000, join the cost of the head office and will be recognised as an expense during its useful life.

Cost of sales of €60,000 in 20X1; the site bricks stay in inventories until the head office is brought into use, then are recognised as an expense in one go at that date.

No expense in 20X1 as long as customers have not paid their invoices, then €105,000 of expenses as cash is collected.