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– 3 years contract from 1 Jan 2002
– Accounting year 1 Jan 2002 to 31 Dec 2002
– Contract price $12 million
– At 31st December 2002:Cost to date $ 6 million
Estimated costs to complete $ 9 million
Amounts invoiced $ 4 million
completed percentage 40%When i calculate the loss, there is a loss of $ 3 million. Why is the $3 million not apportioned, why we are not taking 40% of -3million, instead taking the whole loss amount when calculating contract liability up to December 2002.
May I refer you to the top line of the course notes on page 74 together with the example 4 on that same page and the solution to example 4 that you will find on page 183
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