CERTYNEX IFRS ACADEMY

Zéphyr SA, whose functional currency is the euro, enters into a forward contract with a bank under which it will have to exchange USD 2,000,000 for euros at a rate fixed today (case facts). At the reporting date, the market rate may be more or less favourable to Zéphyr. Which element of the contract fits the definition of a financial liability?

Nothing in this contract: an exchange of dollars for euros is not a delivery of cash and therefore does not fall under financial liability.

The right to receive euros, which makes the contract a financial asset for Zéphyr and rules out a classification as a liability.

The contractual obligation to exchange financial assets with the bank on terms that are potentially unfavourable to Zéphyr.

The fact that the rate is fixed today, which makes the obligation certain and distinguishes it from an obligation to exchange.