The Costs Under an Onerous Contract Are Measured Using Which

question 4

Multiple Choice

The costs under an onerous contract are measured using which valuation method?

• A) The lower of cost or net market value.
• B) The lower of the cost of fulfilling the contract and the penalties arising from failure to fulfil the contract.
• C) The present value method using a risk-free discount rate.
• D) The unavoidable costs of meeting the obligations discounted by reference to market yields at reporting date.