if only it were that easy.
the thing with accounting is that there is very rarely a black and white answer. It is almost always up to interpretation and a lot has to do with the exact facts and circumstances for each case.
Fluence are not really dealing with the revenue standard here, they are arguing that the post balance sheet event should be an adjusting event as stipulated in AASB110.
that standard is very broad, and has to be looked at carefully for each individual case.
Fluence are fighting an uphill battle, in that they will need to prove that the revenue attributed to the Ivory Coast contract was virtually certain on 31 Dec 2019.
I don’t know how they will argue that, but on face value and without all the facts- it would seem that without a signed agreement- nothing was certain on that date.
but I have found that for situations where an expense results from a post balance sheet date, the standard is a lot more likely to accept the recognition of that expense early. And not so likely for revenue.
it all comes down to conservatism built into the accounting standards. Only recognise revenue when it is virtually certain, but you can recognise an expense if it is probable.
my view only.
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