CERTYNEX IFRS ACADEMY

To enter a new market, Belvue Ingénierie has accepted a fixed-price contract whose expected consideration will not cover the expected fulfilment costs. It pays its salesperson a commission of 15,000 linked to the signing. Management has concluded, on the basis of its budgets (fact of the case), that it does not expect to recover this commission. Fact of the case: the provision for the onerous contract under IAS 37 is recognised separately and is not part of the question. What treatment applies?

Recognise it as an asset, since it is an incremental commission linked to signing the contract.

Deduct it from the transaction price of the contract, since it reduces the expected margin on it.

Recognise it as an expense, as recovery is not expected.

Recognise it as an asset, because the practical expedient applies only to contracts of one year or less.