In late 2015, Daisy Company entered into a noncancelable purchase contract for which the contract price is now greater than the market price, and Daisy expects that losses will occur when the purchase is executed in early 2016.Under IFRS, Daisy should recognize a liability and corresponding loss in 2015.

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Under IFRS, when a company has an onerous contract, where the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received, it must recognize a liability and corresponding loss.

In Late 2015, Daisy Company Entered into a Noncancelable Purchase