When percentage-of-completion accounting is not appropriate, U.S. GAAP requires the use of the completedcontract method, while IFRS requires the use of the cost recovery method. Explain how the two methods affectrecognition of revenue, cost of construction, and gross profit over the life of a profitable contract.

Q: Are there circumstances in which the cost method is required under U.S. GAAP but not under IFRS?…

A: IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring…

Q: Which of the following statements regarding the recognition of expenses related to long-term…

A: Recognition of expenses in accounting refers to the process of recording and reporting the costs…

Q: How is the total payment under a unit-price contract determined? When is such a contract likely to…

A: Unit price contract is a common pricing contract which is based on each unit or task of the…

Q: When a company has a contract involving multiple performance obligations, how must the company…

A: Revenue must be realized when the company completes a performance obligation by transferring a…

Q: Revenue should be recognized over time when a performance obligation is satisfied over time. That…

A: Given statement is: Revenue should be recognized over time when a performance obligation is…

Q: Which of the following best describes goodwill impairment in accounting?   A) Goodwill impairment…

A: At each reporting date, an entity is required to assess whether there is any indication that an…

Q: ts) Which principle has FASB used to determine the accounting method for recordin elopment costs? 4…

A: There are specific methods of accounting for different activities and there is specific method of…

Q: A contract does not qualify for revenue recognition if Either party can unilaterally cancel the…

A: Revenues: Revenues are earnings from operations of a business. The operating activities are sale of…

Q: Access the FASB Accounting Standards Codification at the FASB website (asc.fasb.org). Determine the…

A: Depreciation:  It refers to the reduction in the monetary value of fixed tangible assets over its…

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

A: Given is: The accrual of restructuring costs creates obligations (liabilities) referred to as exit…

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: The cost-plus approach:   a. refers to contracts that are modified from their original terms…

A: Cost plus contract means a contract in which buyer agrees to pay the  contractor all the Cost plus a…

Q: Long-term operating assets can be reported on the balance sheet at fair value instead of historical…

A: The question is asking whether long-term operating assets can be reported at fair value instead of…

Q: What two methods are identified in the Codification as appropriate in accounting for long-term…

A: Long term Construction Contract Construction contract are in different type in accordance with need…

Q: The main difference between U.S. accounting standards and international accounting standards when…

A: US GAAP refers to the accounting standards that are endorsed by the Securities and Exchange…

Q: Which of the following costs is not typically capitalized as part of an asset’s cost? A) initial…

A: Introduction:- Capitalized cost of asset consists of acquisition cost of asset and other costs are…

Q: Which of the following factors, if present, would indicate that a transaction is not a contribution?…

A:

Q: Under the completed-contract method,   Question 16 options: a revenue, cost, and gross profit are…

A: Under the completed-contract method,                     The total revenues, total costs incurred,…

Q: Long-term operating assets can be reported on the balance sheet at fair value instead of historical…

A: The question is asking whether long-term operating assets can be reported at fair value instead of…

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.