Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › IFRS 15 — Revenue from Contracts
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- February 16, 2021 at 4:56 am #610578
Dear tutor,
Regarding IFRS 15 – Revenue, i have watched your lectures and understand it quite well thanks to opentuition. However, the part where you taught how to calculate the contract asset/liabilty, is it not updated? Because, I personally attended other tuiton provider but my lecturer stated that the way you calculated them is not updated. Here is for example of what i meant.
Bridgenorth has undertaken a $5million contract to repair a railway tunnel.The contract was signed in 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 20×9 the details of the contract were as follows
$’000
—————————————————–20×9———-x0x8
Total contract price—————————-5000——–5000
cost to date————————————-3600——–2300
estimated cost to completion————–700———-2100
work invoiced———————————3000——–2000
cash received——————————–2400——–1500
%certified complete————————–75%——-40%What is the contract asset to be recognised at 31 December 20X9?
The answer shown is $1,1250,000. However during my lecture, it was stated that it is not updated and the answer should be $750,000.
Thank you in advance.February 19, 2021 at 8:19 pm #611006Hi,
I’ll have a look and see if I need to update the answer for contract asset/liability.
Thanks
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