CERTYNEX IFRS ACADEMY

An analyst presents as insurance revenue of the year the whole premium of 3,600 euros received at the issue of a three-year contract, writing: "The premium is received, so it is revenue for the year." What is the error in this reasoning?

It should have presented these premiums in insurance service expenses, because they are due to the insurer.

It should have waited for the end of the contract to present the revenue, the consideration not being earned until then.

It confuses insurance revenue and finance income: premiums received are insurance finance income.

It links revenue to receipt, whereas revenue reflects the provision of services for the expected consideration during the year.