CERTYNEX IFRS ACADEMY

Ténarès develops bespoke software with an expected margin of 35%, well above the operating margin of 12% it usually earns on similar contracts. If the customer terminates for reasons other than Ténarès's failure to perform, the contract entitles it, at all times, to the costs incurred plus 12%. The software has no alternative use to Ténarès (case data). Is there an enforceable right to payment for performance completed to date?

No: the compensation should include the whole margin of 35% expected under the contract.

Yes: the usual margin on similar contracts may be a reasonable margin.

No: only payment of the full contract price would be a right to payment.

Yes, and compensation for the loss of profit alone would also have been enough.