3. The following details apply to a contract where performance obligations are satisfied over time at 31 December 2015. Total contract revenue Costs to date Estimated costs to 40,000 completion Amounts invoiced 70,000 Amount paid up to 45,000 31.12.2015 The contract is agreed to be 40% complete at 31 December 2015. 100,000 50,000 Required: Show how a contract would be reflected in the statement of financial position and in the statement of profit or loss at 31 December 2015 under IFRS 15 Revenue from contracts with customers.

3. The following details apply to a contract where performance obligations are satisfied over time at 31 December 2015. Total contract revenue Costs to date Estimated costs to 40,000 completion Amounts invoiced 70,000 Amount paid up to 45,000 31.12.2015 The contract is agreed to be 40% complete at 31 December 2015. 100,000 50,000 Required: Show how a contract would be reflected in the statement of financial position and in the statement of profit or loss at 31 December 2015 under IFRS 15 Revenue from contracts with customers.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

3. The following details apply to a contract
where performance obligations are satisfied
over time at 31 December 2015.
Total contract
revenue
Costs to date
Estimated costs to 40,00O
completion
Amounts invoiced 70,000
Amount paid up to 45,000
31.12.2015
The contract is agreed to be 40%
complete at 31 December 2015.
Required:
Show how a contract would be reflected in
100,000
50,000
the statement of financial position and in the
statement of profit or loss at 31 December
2015 under IFRS 15 Revenue from contracts
with customers.

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