- This topic has 3 replies, 2 voices, and was last updated 8 years ago by
.
- Posts
Hello dear tutor
My question is about IFRS 15 and construction contract:
1-should we use ias 11 or ifrs 15 for construction contract in the exam?(i think we should use ifrs 15 as it replaces ias 11)…
so please answer to question 2&3 if we must use ifrs 15 in exam:2-if a contract is a normal one without any extra cost(eg:contract price=$20m and cost=$15m)
How should we use ifrs 15?
Is it correct to say:
2.1-We must recognise revenue and cost according to the stage of completion(one of 2 basis:cost or price)because control transfer during time and not at once?
2.2-should we recognise asset(the amount due from customer) according to the stage of completion(the same as revenue)-assume that customer paid nothing in advance3-if the contract is loss making(eg:revenue=$200000 and cost exceeded to $350000)
Is it correct to say:3.1-if customer do not accept to pay for extra $150000….
We must recongnise $200000 as asset(according to stage of completion) and provide for $150000(donot recognise as asset because it wont be RECOVERED according to ifrs 15)according to ias 37 immidiately.3-2.if customer accept to pay for extra $150000:
It is not loss making and so we must recognise $350000 as asset(according to stage of completion) as it can be seen as a MODIFIED contract according to ifrs 15(and this part will be recovered too)…I am sorry if i ask many questions…
But i have problem as it is a relatively new standard and related questions are not amended in acca’s website(and i donnot have any exam kit)
Thank you in advance
‘should we use ias 11 or ifrs 15’ – IAS 11 no longer exists so cannot be used – it’s gone!
‘We must recognise revenue and cost according to the stage of completion’ – yes
‘should we recognise asset(the amount due from customer) according to the stage of completion’ – yes
3.1 – apply the calculations shown in the course notes for contracts where losses are forecast
3-2 – it’s difficult to imagine a customer accepting an additional liability of almost 100% on top of the original contract price
If the customer should (foolishly?) accept that additional liability, then it will be treated as a modified contract under IFRS 15
HOW CAN YOU ADMIT THIS!!!!! ‘and i donnot have any exam kit’
Get one, as soon as you can! It’s an investment – an asset. It’s not an expense. The benefit of the cost of an up-to-date exam kit will be reaped for many years to come as a result of you passing the P7 exam on the route to qualification, a better job, improved employment prospects, greater remuneration
Invest in a revision kit! You can even do it through opentuition by clicking on the black box on the right of your screen and taking advantage of a 20% discount
And don’t forget to get on top of the new audit report format!
This is important!
Thank alot….it really helps
I used to study from OT notes and then study ACCA’s past papers only(download questions and answers from ACCA’s website and study them)instead of studying any revision kit(and i did the same thing for last 13 papers and pass them)…
I think this is better to write acca’s answers in exam and of course CHEAPER especially in my country….
But maybe the main reason was SANCTIONs against my country where i couldnot buy with my credit card….There is only one problem:
New areas(such as ifrs 15) which are not amended by ACCA….
And the sollution is : OPENTUTION…where i ask you and you answer my questions in the best and easiest way…By the way…there is no problem with OPENTUITION…
Again thanks for your helps and of course thanks for your advise…
- You must be logged in to reply to this topic.