AC2101 S1 2014 Seminar 19 Revenue.pptx

Capitalised unused construction materials variation

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: takes a substantial period of time to get ready for its intended use or sale FRS23:5 §༊  Depending on the circumstances, any of the following may be qualifying assets: §༊  Inventory, manufacturing plants, power generation facilities, intangible assets, investment properties FRS23:7 6 3 Illustrations §༊  Illustration 2 Ø། Interest Costs – Capitalised? Ø། Unused construction materials Ø། Variation order/reimbursement claim FRS11:11-21,31 Ø། Warranty & other construction costs 7 A Note on Construction Revenue *  Contract revenue is measured at the fair value of the consideration received or receivable. The measurement of contract revenue is affected by a variety of uncertainties that depend on the outcome of future events. For example: *  variations *  claims *  penalties, etc. FRS11:12 8 4 Seminar Question §༊  Question 1 §༊  TL 9 Recap: Construction Contract Accounting §༊  Step 1: Check the overall profitability of the contract Ø།  Determine the applicable scenario a.  Scenario 1: Current estimates à༎ Profit = % of completion (FRS11:2...
View Full Document

This document was uploaded on 02/10/2014.

Ask a homework question - tutors are online