Under IFRS, how are onerous contracts recognized if the unavoidable costs exceed the benefits from receiving the contracted goods or services?

Select answer from the options below

As soon as a contract becomes onerous, a loss and a liability should be recognized.

Even if a contract becomes onerous, no loss is recognized. However, it still must be disclosed in the notes.

No loss or liability is recognized or disclosed for onerous contracts under IFRS or ASPE.

IFRS provides no guidance for onerous contractual obligations, such as may occur with purchase commitments.