CERTYNEX IFRS ACADEMY

The Haliane shipyard builds a polar research vessel to specifications unique to a scientific institute. To sell it to another buyer, it would have to be reworked at great cost or sold at a significant loss. The contract gives Haliane, at all times, if the institute terminates for reasons other than Haliane's failure to perform, the right to recover the costs incurred plus a reasonable margin (an enforceable right according to a legal opinion, case data). How should revenue be recognised?

Over time: no alternative use due to a practical limitation, and an enforceable right to payment.

On delivery: the vessel could always be resold, even at a loss, so it has an alternative use.

On delivery: the contract contains no clause prohibiting resale of the vessel.

Over time, but only for the part of the costs already invoiced to the institute.