Bridgenorth has undertaken a $5 million contract to repair a railway tunnel. The contract was signed on 1 April 20X8 and the work is expected to take two years. This is a contract where performance obligations are satisfied over time and progress in satisfying performance obligations is to be measured according to % of work completed as certified by a surveyor. Bridgenorth has an enforceable right to payment for performance completed to date. At 31 December 20X9 the details of the contract were as follows: 20X9 20X8 $ $ Total contract value 5,000,000 5,000,000 Costs to date 3,600,000 2,300,000 Estimated costs to completion 700,000 2,100,000 Work invoiced to date 3,000,000 2,000,000 Cash received to date 2,400,000 1,500,000 % certified complete 75% 40% What is the profit recognised for the year ended 31 December 20X8?
Bridgenorth has undertaken a $5 million contract to repair a railway tunnel. The contract was signed on 1 April 20X8
and the work is expected to take two years. This is a contract where performance obligations are satisfied over time
and progress in satisfying performance obligations is to be measured according to % of work completed as certified
by a surveyor. Bridgenorth has an enforceable right to payment for performance completed to date.
At 31 December 20X9 the details of the contract were as follows:
20X9 20X8
$ $
Total contract value 5,000,000 5,000,000
Costs to date 3,600,000 2,300,000
Estimated costs to completion 700,000 2,100,000
Work invoiced to date 3,000,000 2,000,000
Cash received to date 2,400,000 1,500,000
% certified complete 75% 40%
What is the profit recognised for the year ended 31 December 20X8?
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