AC2101 S1 2014 Seminar 18 Revenue.pptx

Total contract revenue can be measured reliably b

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Unformatted text preview: identified and reliably measured 5 Stage of completion can be determined by a.  Proportion of costs incurred to date to estimated total costs (i.e., cost- to- cost basis) b.  Surveys of work performed c.  Completion of a physical proportion of the contract work Note: Progress billings & collections normally do not reflect the work performed FRS11:30 6 3 Clicker Cost plus Contract, outcome is reliably measured when a.  Total contract revenue can be measured reliably b.  Probable inflow of economic benefits c.  Costs to complete & stage of completion can be measured reliably d.  Costs attributable to construction can be clearly identified and reliably measured 7 FRS 11 para 24 Contract Costs *  Direct Costs *  Attributable Cost – insurance, design cost, construction overheads etc. *  Other Costs Guiding principle – costs are related to the project Be careful of front loading. Costs should reflect work done 8 4 Construction Contract Cost Comprise 1.  Costs that relate directly to the specific contract 2.  Costs that are attributable to contract activity in general & can be allocated to the contract 3.  Such other costs that are specifically chargeable under the contract terms 4.  Reference: FRS 11 paras 16- 21 9 FRS 11 – Construction Contracts 3 possible scenarios: 1.  Where outcome can be reliably estimated & current estimates indicate an overall net profit on the project...
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This document was uploaded on 02/10/2014.

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