CERTYNEX IFRS ACADEMY

Plaline is developing a policy for an arrangement not covered by IFRSs (case data). The draft policy follows the legal form (a sale) although Plaline keeps, in substance, the use and risks of the asset. What is the conclusion?

The policy is reliable if it reflects the tax treatment of the arrangement.

The policy is not reliable: it favours legal form over economic substance.

The policy is reliable as long as it is applied consistently from one year to the next.

The policy is reliable because the legal form is documented by a signed contract.