According to IAS 37, with Respect to Onerous Contracts, a Provision

question 4

Multiple Choice

According to IAS 37, with respect to onerous contracts, a provision should be recognized for "unavoidable costs of the contract", which is:

• A) the intrinsic value of the contract.
• B) the lower of cost or market value of the contract.
• C) the lower of cost of fulfillment or the penalty from non-fulfillment of the contract.
• D) None of the above

---

Definitions:

Purchasing Department

The Purchasing Department is responsible for procuring goods and services for a company, ensuring the right materials are available at the best prices to meet organizational needs.

Outstanding Checks

Outstanding checks refer to checks that have been written and recorded by an issuing company but not yet cashed or cleared by the bank.

Receiving Report

A document completed by the receiving staff of a company, detailing the items received, their quantities, and condition upon delivery.

Invoice

A document issued by a seller to a buyer that outlines a transaction and includes details of goods or services provided, prices, date, and payment terms.