[krishnaveni]

Thank you for the prompt reply.

[krishnaveni]

Hi sir,

The company recognises revenue on the basis of the costs completed as a proportion of the final contract value. the client gains the use of the asset doing its construction.

the following details apply to a contract where performance obligations are satisfied over time at 31 December 20X5.

Total contract revenue 120,000
Cost to date 48,000
Estimated costs to completion 48,000
Amounts invoiced 50,400

the contract is agreed to be 45% complete at 31 December 20X5.

What amount should be recognised in the statement of financial position at 31 December 20X5 as a contract asset?

Could you please explain the answer for this sir?
working provided is
120,000-48,000-48,000 = 24,000 * 45% = 10,800

Cost incurred 48000 + 10,800 – 50,400 = 8,400 I don’t understand this part sir, kindly help to clarify.

Thank you!

[Author]

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