Springthorpe entered a three-year contract on 1 January 20X2 to build a factory. This is a contract where performance obligations are satisfied over time. The percentage of performance obligations satisfied is measured according to certificates issued by a surveyor. The contract price was $20 million. At 31 December 20X2 details of the contract were as follows. $m Costs to date 9 Estimated costs to complete 5 Amounts invoiced 4 Valuation certified complete work 4.5 Required: Explain, with journal entry, how to account for above transaction in accordance to IFRS 15: Revenue from contract with customer and prepare extracted financial statements for the year ended 31 December 20X2
Springthorpe entered a three-year contract on 1 January 20X2 to build a factory. This is a contract where performance obligations are satisfied over time. The percentage of performance obligations satisfied is measured according to certificates issued by a surveyor. The contract price was $20 million. At 31 December 20X2 details of the contract were as follows. $m Costs to date 9 Estimated costs to complete 5 Amounts invoiced 4 Valuation certified complete work 4.5 Required: Explain, with journal entry, how to account for above transaction in accordance to IFRS 15: Revenue from contract with customer and prepare extracted financial statements for the year ended 31 December 20X2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Springthorpe entered a three-year contract on 1 January 20X2 to build a factory. This is a contract where performance obligations are satisfied over time. The percentage of performance obligations satisfied is measured according to certificates issued by a surveyor. The contract price was $20 million. At 31 December 20X2 details of the contract were as follows.
$m
Costs to date
9
Estimated costs to complete
5
Amounts invoiced
4
Valuation certified complete work
4.5
Required:
Explain, with
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