AC2101 S1 2014 Seminar 18 Revenue.pptx

26 13 repeat je1 to je4 for 20x4 je1 incurrence of

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Unformatted text preview: eted to- date (cost- to- cost basis) = $600k / $800k = 75% v༇  Current year prot = [$0.75m - $0.6m] or [75% x ($1m - $0.8m)] = $0.15m v༇  Revenue to be recognized = $1m x 75% = $0.75m v༇  Costs to be recognised = $0.8m x 75% = $0.6m 19 Journal entries are… •  Recognition of revenue & costs at end of period Dr Construction costs $600k Dr Construction- in- progress(CIP) $150k Cr Construction revenue ($750k) In P/L In SFP In P/L 20 10 Profit and Loss Account Construction revenue Less Construction costs Profit (Loss) $xxx $xxx $xxx 21 Profit and Loss Account for 20x3 Construction revenue Less Construction costs Profit (Loss) $750 $600 $150 22 11 Statement of Financial Position Construction- in- progress Costs incurred to date Add/(less) attributable profit/(loss) Less Progress billings Under (over) billings $S $T $X $Y $Z 23 Statement of Financial Position as at 31 Dec 20x3 Construction- in- progress Costs incurred to date $600 Add/(less) attributable profit/(loss) $150 $750 Less Progress billings $400 Under (over) billings $350 24 12 CIP versus Progress Billings §༊  CIP > Progress billings = Gross amount due from customers, i.e. underbilling §༊  CIP < Progress billings = Gross amount due to customers, i.e. overbilling 25 Scenario 1: Current estimates à༎ Overall Profit on Project Illustration 1 - Project A §༊  Contract price = $1m; to be completed in 2 yrs §༊  At end of 20x4...
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This document was uploaded on 02/10/2014.

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