CERTYNEX IFRS ACADEMY

Hydrovia is performing a civil engineering contract. The customer has approved a change of route that adds work, but still disputes the amount of the price increase claimed by Hydrovia. How does Hydrovia treat the change in price at the reporting date?

It disregards any increase as long as the customer disputes the amount, because a disagreement on the price prevents the existence of a contract modification under IFRS 15.

It estimates the increase under the requirements on variable consideration and includes in the transaction price only the portion that meets the constraint.

It includes the full increase claimed, since the change of route has been approved by the customer.

It recognises revenue equal to the costs of the additional work, without estimating the price increase.