CERTYNEX IFRS ACADEMY

Urbanel Méca concluded that a contract priced at 500,000 is not onerous: its incremental costs still to be incurred are 470,000. It did not take into account the share, determined using its allocation key (case data), of 60,000 of depreciation of the equipment used for this contract and others. What is the error?

The contract price should have been discounted before the comparison.

Only the costs already incurred should have been compared with the price.

The depreciation share should have been deducted from the incremental costs.

The cost of fulfilling should have included the depreciation share: the contract is onerous.