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I thought about the discount rate but believed this to be in relation to the salary, as the salary is a contractual liability, it should be recorded on the SOFP at inception.
Guess we will find out soon! Good luck all.
Like many of the posters here, I too came out of the exam with the mindset that I need to prepare to resit.
Seeing the footballer responses has me even more concerned, as I have treated it as an IA. I considered lease, but the fact that FC Grate would not stop him from leaving if he wanted to join another club inferred to me that they didn’t “control” the player. Furthermore they subtly threw in the comments about him “likely being fit” at the end of his contract (inferring no impairment)
Having looked at football club balance sheets, this looks similar to the way in which they account for players (big sign on fee, up front cost to club, later paying deferred consideration, plus wages to player)
Is there any particular reason why people went for lease rather than IA?
