CERTYNEX IFRS ACADEMY

The retail chain Halvorine forecasts, for its network of town-centre shops, an operating loss of 1,200,000 in 20X6. What does it recognise at 31 December 20X5 for this loss?

A provision of 1,200,000, as the loss is budgeted and quantified by management control.

A provision equal to half the loss, given the uncertainties about the economic outlook.

A contingent liability of 1,200,000 disclosed in the notes, the loss being merely possible.

Nothing.