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Hello sir, based on the question below, how to differentiate ifrs 2 and IAS 38?
Greenie has issued 1 million shares of $1 nominal value for the acquisition of franchise rights at a local airport. Similar franchise rights are sold in cash transactions on a regular basis and Greenie has been offered a similar franchise right at another airport for $2·3 million. This price is consistent with other prices given the market
conditions. The share price of Greenie was $2·50 at the date of the transaction. Greenie wishes to record the transaction at the nominal value of the shares issued.Because when I was doing this question, I thought it is IAS 38 because of the franchise rights, however, the answer scheme is talking abt IFRS 2.
I understand – IFRS 2 applies in this situation – FV of goods or services acquired. If you see it again that’s what to go for.
There is no ‘cost’ to to the company because it’s not surrendering any resources (e.g. money) – so IAS 38 wouldn’t work (or be marked right!).
Don’t forget…………..stay away from standard numbers in the exam – they just confuse the marker.
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