CERTYNEX IFRS ACADEMY

The audit committee of a media group is reviewing the revenue-based amortisation used for certain acquired rights. Which of the following statements are correct?

A revenue-based method is appropriate in principle, unless the entity demonstrates that it distorts the charge.

When the predominant limiting factor inherent in the right is reaching a revenue threshold, revenue may be an appropriate basis for amortisation.

A high correlation between revenue and the consumption of the right's benefits allows the presumption to be rebutted.

Once the presumption has been rebutted on acquisition, the method no longer needs to be reviewed for the whole term of the right.

The method used, even a revenue-based one, is reviewed at least at each financial year-end and a change is accounted for as a change in estimate.