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Revenue - Example 6 (loss making contracts) - ACCA Financial Reporting (FR)

10 Comments

  1. Univer
    Example 7 & Example 8(Revenue from Contracts with Customers) is also not addressed in the videos of this segment
  2. Shahriyar
    Where is part of financial position in revenue and other theoretical parts of this chapter ifea 15
  3. Zoltan
    isn't this an onerous contract? and if yes why aren't we making provision, instead of recognizing the loss
  4. van
    Hi, are there also lectures for Revenue Recognition for Statement of Finc Position? not sure why i cant find it. Revenue – Example 6 (loss making contracts) is the last video for the chapter.
  5. Hung
    Dear Sir,
    Thanks for your lecture. I have the same issue with the above students. I don't understand why you get 100% loss (5) then get cost -23. Please help us clarify.
    Thanks,
    Hung
  6. Meself
    Prudence ?
  7. Abdurrahman
    I don't get how we can have our costs incurred to date as 23m as it is already given to us as 25m. Shouldn't we add the the costs as 25m and then balance off to get the Revenue, which will then be 20m instead of the current 18m
  8. foriwaah
    yes this is very strange
  9. hieuhtk55ftu
    Hi, in my opinion. Because we must recognise all loss in the first year of contract (Prudence), so:
    31.12.X5
    revenue 20X5: 40*45% = 18m
    loss (total loss) = 40-25-20 = -5
    cost (bal figure) = 18 - (-5) = 23m
    31.12.X6
    revenue 20X6: 40-18=32
    loss = 0 (all loss is recognised in 20X5)
    cost (bal figure) =32
  10. Calum
    to make your answer clearer, the cost/revenues in 20X6 are both 22 (not 32) to tie back to the totals in the question

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