Bill (6/11)

And per the answer $350,000 will be recognised as an an unavoidable cost - but this is offset against the profit initially expected on the contract so the net cost is $150,000. The company (Bill) develops properties - so when it incurs costs on the development of a property to a customer's specification (i.e. IFRS 15 is the relevant standard) - it is not an expense in Bill's profit and loss but a contract asset - it will be recovered from the customer. This is assumed knowledge of FR/(F7) and SBR/(P2). I cannot comment on the continued recognition of $200,000 as an asset. I think this is a "hangover" from how this has been adapted from when IAS 11 was the relevant standard. You would have to ask BPP to comment/clarify or otherwise ignore.

Ah - I think I've got what it is saying. So not all the $200k will currently be recognised as an asset - as you say, the contract is not complete yet. But for the portion of completeness there will be some contract asset and this will still be recognised.