There is a significant difference in accounting for a price concession and an impairment loss. And we are not even close, it is even worse….
What about an implied price concession?
Construction companies have a certain capacity of daily production/construction – OK, there is some flexibility by hiring temporary construction workers, but there is an end to that – ‘They are never there when you need them’. As a result construction companies with a small sales funnel or an irregular distribution over time in working on the live construction contracts may be willing to offer an implied price concession to win a construction contract to avoid a larger loss in not filling their (minimum) capacity. Implied price concession or Impairment… Read more