Construction Companies: NASS Construction Group2021The following are extracts from the NASSConstruction Group 2021 Financial statements10 CONTRACT ASSETS31 December202131 December2020300,133Cost incurred plus attributable profits on contracts-in-progressProgress billings made towards contracts-in-progress264,569(241,027)(262,815)23,54237,318Allowance for impairment losses(850)(1,082)22,69236,23615 CONTRACT LIABLITIES31 December202131 December2020Progress billings received and receivable16,874Costs incurred plus recognised profits on contracts-in-progress31,227(23,096)(4,150)12,7248,131(a) With reference to the NASS Construction Group2021 Financial statements, explain how contractrevenue is measured in a construction company.(b) With reference to the above extract,explain contract assets and contractliabilities and their components shown in theabove extracts

Contract Account In the contract Accounting there are number ways the revenue which are recognized…

Answered: (a) With reference to the NASS…

(a) With reference to the NASS Construction Group 2021 Financial statements, explain how contract revenue is measured in a construction company. (b) With reference to the above extract, OY ain

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Which of the following statements are true? а. Revenue should be generally recognized when the…

A: According to the accrual basis of accounting, revenue is recognized when the performance is made.

Q: Itemized Deductions can be classified as: a. Expenses that are purely personal in nature or…

A: Deduction can be defined as claims which lower a person or organisation’s liability by lowering…

Q: Based on the requirements and guidance of IFRS 15, one of the following is not considered part of…

A: Under the contract costing, there is an agreement made between two parties in respect of performing…

Q: Demonstrate revenue recognition for long-term contracts, both at a point intime when the contract is…

A: Long term contracts usually qualify for revenue recognition over time. We recognise revenue over…

Q: Segment reporting deals with in-detail segment-wise financial reporting in the financial statements…

A: Follow the below regulations to find out what are the segments that need to be reported as per US…

Q: NZ IFRS 15 identifies the seven important elements of a contract with a customer that need to be…

A: NZ IFRS 15 helps businesses figure out when and how to record the money they earn from selling…

Q: A potential offering price for a company is computed by adding the estimated goodwill to the…

A: Goodwill means reputation earned by the business over the period of time. Goodwill happens when…

Q: The third step in the process for revenue recognitio

A: REVENUE RECOGNITION shows the transfer of promised goods or services in an amount that reflects how…

Q: re emission allowances (EAs)? How do businesses obtain them? b) Explain how EAs held by an…

A: Pollution: It is the introduction of bad particles into the natural environment. It is the unhealthy…

Q: How do companies account for long-term contracts that qualify for revenue recognition over time?

A: The companies use the following two methods to record the long term contract when it turns out to be…

Q: Explain the 5 step Revenue Recognition process as found in IFRS 15-Revenue from Contracts with…

Q: Based on the background example of this assignment, kindly provide answer/working of this assignment…

A: Liquidity, acid test, and debt ratios are some of the most important ratios. These ratios help the…

Q: Activity measures are designed to quantify the impact of a firm’s ability toefficiently utilize its…

A: Turnover ratio: It can be defined as a financial ratio that is used to analyze the effectiveness of…

Q: Accounting for operating capital lease. What are the issues that the accountant faces in recording…

A: Operating lease gets different accounting treatment both for the lessor and the lessee. They are as…

Q: For the following situations, identify whether the situation represents a violation or a correct…

A: There are principles and assumptions based on which whole accounting depends regarding how to enter…

Q: The accrual of restructuring costs creates obligations (liabilities) referred to as exit or disposal…

A: 1.

Q: Identify the proper accounting for losses on long-term contracts.

A: Revenue recognition: Revenue recognition principle states that every business organization should…

Q: agreement at method e-of-completion method ent method

A: The revenue recognition method that is applied to long term contracts is percentage of completion…

Q: Which item of the income statement represents the taxable income of the firm? EBIT…

A: Taxable income is the income after deducting all the expenses in the business, before applying tax…

Q: What is Revenue Recognition Companies should recognize revenue in the accounting period in which a…

A: Revenue: The entire amount of money received from the sales related to the main operation of the…

Q: The amount of consideration to which the entity expects to be entitled in exchange for transferring…

A: As per IAS 115 Revenue recognition A performance obligation is an promise to customer to transfer…

Q: Under the completed-contract method, the Contract Asset/Liability account balance will consist of O…

A: The completed contract method is an accounting approach where revenue and expenses from long-term…

Q: How Goodwill is accounted for on financial statement. What is inter-company long-term construction…

A: Goodwill is an intangible asset reported under the non-current assets in the Balance sheet. Only…

Q: David Mendez Under the percentage-of-completion method, how should the balances of progress billings…

A: Progress Billings as income: Progress billings represent amounts billed to customers for work…

Q: How can a single revenue recognition standard address all the complexities and unique clauses…

A: INTRODUCTION:- Revenue recognition is an important aspect of accounting and financial reporting, and…

Q: When an organization considers its work-in-process, how should it be classified on a balance sheet?…

A: Work in process is a part of the inventory component of balance sheets, Inventory is categorized…

Q: Outline the accounting procedures involved in applyingthe operating method by a lessor.

Q: Access the FASB’s Codification Research System® at the FASB website (www.fasb.org) and select Basic…

A: Answer for the each of the following items:

Q: How do the Accountants measure the net income of a specified operating period?

A: Net income: The bottom line of the income statement which is the result of excess earnings from…

Q: Describe the conditions when contract assets and liabilitiesare recognized and presented in…

A: Contract assets: It is the right of the firm to receive payment for the goods transferred or…

Q: Income reported for a business entity depends on the proper recognition of revenues and expenses. In…

A: Recognition of revenues and expense refers to the timing and period in which they shall be recorded…

Q: Accounting provides information on (A) Cost and income for managers (B) Company’s tax…

A: Accounting is the method of recording and maintaining of books of accounts of a entity.

Question

Construction Companies: NASS Construction Group
2021
The following are extracts from the NASS
Construction Group 2021 Financial statements
10 CONTRACT ASSETS
31 December
2021
31 December
2020
300,133
Cost incurred plus attributable profits on contracts-in-progress
Progress billings made towards contracts-in-progress
264,569
(241,027)
(262,815)
23,542
37,318
Allowance for impairment losses
(850)
(1,082)
22,692
36,236
15 CONTRACT LIABLITIES
31 December
2021
31 December
2020
Progress billings received and receivable
16,874
Costs incurred plus recognised profits on contracts-in-progress
31,227
(23,096)
(4,150)
12,724
8,131
(a) With reference to the NASS Construction Group
2021 Financial statements, explain how contract
revenue is measured in a construction company.
(b) With reference to the above extract,
explain contract assets and contract
liabilities and their components shown in the
above extracts

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

5.) For each definition, list the “ratio category (or grouping)” that is described by filling in the blanks from (a) to (f) and provide one example for each category or grouping. a) Determines a company’s ability to pay off short term obligations or debts as they come due. ________________________ b) Relates company’s internal performance to the external judgment of the marketplace in terms of what it is worth. ________________________ c) Identifies percentage of earnings paid out to shareholders and what is reinvested for internal growth. ________________________ d) Speed at which company turns over its inventory, receivables and long-term assets. ________________________ e) How a company is financed between debt [lenders] and equity [owners]. ________________________ f) Measures return on sales, assets and total capital. ________________________
Which of the following overall accounting concepts has a number of exceptions under GAAP? a) Historical cost b) Transaction basis c) Conservatism d) Accrual accounting
5. Which financial information is found in a company's annual report? A. Employee salaries B. Marketing strategies • C. Financial statements • D. All of the above
25 - Which of the following is the table showing all the revenues of an enterprise in a certain period, the costs and expenses incurred in the same period and the profit or loss gained by the enterprise as a result?A) INCOME STATEMENTB) CASH FLOW STATEMENTC) BALANCE SHEETD) COST TABLEE) ASSETS STATEMENT
As per IAS 16: PPE, how would you recognize your company’s vehicle that was acquired with the intention of generating Revenue
Evaluate the financial analysis of the company's working capital and long term debt.
how long-term construction contract are accounted for and some of the issues that are faced for financial reporting purposes.
Which of the following gives the basic factors of business operations of which their inter-relationship is studied in Cost-Volume-Profit Analysis? Select one:a. Cost of Production, Volume of Purchases, Quantity of Fixed Assetsb. Cost of production,Volume of production or sales, Profitc. Revenues, Expenses, Equityd. Assets, Liabilities, Equity
For contracts which are very near to completion, the profit is ascertained by the formula- a.Estimated profit x work certified/contract price b.Estimated profit x work certified/contract price x cash received/work certified c.Estimated profit x work certified/contract price x cost of work/total cost to date d.2/3 x Notional profit x cash received/work certified.
Explain the revenue recognition process when a performance obligation is satisfied over time according to IFRS 15-Revenue from Contracts with Customers.