There is different methods given to account for contract assets in bpp & kaplan which method should i follow -
kaplan method -
cost incurred up to date xxx
(add/less) profit/loss xxx
(less) amount billed (xxx)
contract asset =XXX
bpp method -
revenue recognized xxx
(less) amount billed xxx
contract asset =XXX
in most cases both the method would give me same answer but in cases when cost recognized up to date is more than the cost recognized the answer differs?
WHICH METHOD SHOULD I FOLLOW I AM REALLY CONFUSED IN THIS CHAPTER SO I REFFERED BOTH THE BOOKS
Ask the Tutor ACCA FR
ACCOUNTING FOR CONTRACT ASSET
Hi,
Yes, this is still an ongoing issue and has not been resolved as yet with the ACCA as to which treatment they will wish to see. Currently you can use either and will not be penalised.
Thanks
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