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Hello Sir
In my revision in this area in the text book an activity question stated below:
(my question relates to Company A)
Required:
Discuss what if any, should be recognised in the F/S of Company A and Company B relating to these situations.1. Company A reports under IFRS Standards and provides a training programme for all of its members.
My Answer: Training should be recognised as an expense in the P&L and should only be recognised in the F/S if a credit is begin given (Creditors) which is a liability to Company A.
IS MY ANSWER CORRECT OR INLINE?The answer from the book spoke of checking to see if it is an asset first, however only a past event exist and also spoke of if any potential benefit to staff and that the company did not necessarily have control over staff.
Thank you
SherleneHi,
Your answer states the correct treatment, i.e. to expense the training, but you do not correctly justify the answer. The answer in the book is correct as we need to look at the possibility of the training creating an intangible asset via the knowledge acquired by staff who attend the training.
Thanks
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