Archive about 'Construction Contracts Accounting'
Construction Contract Question Example To Compute The Percentage Of Completion and Disclosure/Presentation In the Income Statement And Balance Sheet.
Tweet On 1 st January 2007, XYZ Construction Co Ltd has signed a fixed price contract of $ 42 million to build a bridge over a period of two years. At 31st December 2007, the following information are as follows:- $ million Cost of construction material 10 Site labor cost 9 Depreciation of plant [...]
Tweet Under the percentage of completion method, revenue and expenses are recognized in income as the contract activities progress by reference to the stage of completion of a contract. The costs incurred in reaching the stage of completion are matched with this revenue, resulting in the reporting of revenue, expenses and profit which can be [...]
Tweet EFFECTIVE DATE This Standard becomes operative for financial statements covering periods beginning on or after 1 July 2007. OBJECTIVE To prescribe the accounting treatment of revenue and costs associated with construction contracts. This is because the start data and complete/end date for construction contracts usually fall into different accounting period hence the primary issue [...]