CERTYNEX IFRS ACADEMY

For an onerous contract fulfilled using a dedicated packaging line, Valmondis recognised a provision for the whole expected loss without examining the value of the line, whose carrying amount nevertheless exceeds its recoverable amount. What is the error?

The impairment loss on the line had to be recognised before the provision.

The provision should have been discounted over the remaining useful life of the packaging line.

No provision is possible when a dedicated asset is used.

The line should have been reclassified as inventory.