ACCA FR · Guided practice (Show me how)
Chapter 16: Revenue from contracts with customers (IFRS 15)
Revenue over time - progress, profit and the contract asset or liability
The notes' building contract (chapter 16, IFRS 15). Work in $ million.
Alex commenced a three-year building contract during the year ended 31 December 20X4 at a contract price of $50 million. At 31 December 20X4 the costs incurred to date were $15 million and the contract was estimated to be 40% complete. At 31 December 20X5 the costs incurred to date were $28 million and the contract was estimated to be 70% complete.
Alex has invoiced the customer for work completed to date as follows: by 31 December 20X4, $16 million; by 31 December 20X5, $26 million.
Statement of profit or loss, 20X4 and 20X5
Calculate Alex's contract revenue and profit for each of the years ended 31 December 20X4 and 31 December 20X5, and its contract costs recognised in the year ended 31 December 20X5.
Statement of financial position: contract asset or liability
Calculate Alex's contract asset or liability at 31 December 20X4 and 31 December 20X5.
Opening this exercise…