Question: Roland Corp. signed an agreement with Linx, which requires that if Linx does not meet certain contractual obligations, Linx must forfeit land worth $40,000 to

Roland Corp. signed an agreement with Linx, which requires that if Linx does not meet certain contractual obligations, Linx must forfeit land worth $40,000 to Roland.

Roland’s accountants believe that Linx will not meet its contractual obligations, and it is probable Roland will receive the land by the end of 2011. Roland uses IFRS for reporting purposes. How should Roland report the land?

a. As investment property in the asset section of the balance sheet.

b. As a contingent asset in the current asset section of the balance sheet.

c. In a footnote disclosure if the economic benefits are probable.

d. As a contingent asset and other comprehensive income for the period.

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