CERTYNEX IFRS ACADEMY

Caldrin SA sells ski equipment; according to the case, more than 60% of its annual revenue is earned in the fourth and first quarters. In the second quarter, the finance director proposes to recognise as revenue a quarter of the estimated annual revenue, that is EUR 2,500,000 out of EUR 10,000,000, "so that the quarter looks like an average year". Sales actually made in the quarter are EUR 900,000 (case data). What must Caldrin SA do?

Recognise EUR 2,500,000, because seasonal revenue may be spread evenly between the quarters to obtain a regular interim result, whatever its date of realisation.

Recognise EUR 900,000 and then defer that amount to the fourth quarter, the usual period of high activity, to match revenue with the season.

Recognise EUR 2,500,000 in anticipation if management estimates that the season's sales will indeed reach EUR 10,000,000 over the year.

Recognise the EUR 900,000 of sales made, under the annual criteria, without anticipating seasonal revenue not yet earned.