Revenue from contract – expected loss

Dear Sir, below is the question:

Springthorpe entered into a three-year contract on 1 January 20X2 to build a factory. This is a contract where performance obligations are satisfied over time. The percentage of performance obligations satisfied is measured according to certificates issued by a surveyor. The contract price was $12 million. At 31 December 20X2 details of the contract were as follows.

$m
Costs to date 6
Estimated costs to complete 9
Amounts invoiced 4
Certified complete 40%

What amount should appear in the statement of financial position of Springthorpe as at 31 December 20X2 as contract assets/liabilities in respect of this contract?

A $1 million contract liability
B $2 million contract liability
C $1 million contract asset
D $2 million contract asset

Here is the solution is suggested:

Solution (1):

Sales (1.2m x 40%)
Cost (Balancing figure)
Loss