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If say there is some revenue of 40.000, and there is a certain amount of costs incurred to date, and 8% completion is known. as I understood from the practice index, then this % is applied to revenue and recognised as costs incurred to date of 3200, is it correct? and this is the case, when profit is only recognised, when say 25% of contract is complete?
Thanks.
Correct … although the percentage of 25% is variable dependent upon the entity’s accounting policy
The IAS states that no profit should be recognised until the contract is sufficiently advanced to be able to determine with reasonable certainty the ultimate outcome of the contract
OK?
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