1
Disclosure
An enterprise should disclose:
1) the amount of contract revenue recognised as revenue
in the period;
2) the methods used to determine the contract revenue
recognised in the period; and
3) the methods used to determine the stage of completion
of contracts in progress.
An enterprise should disclose each of the
following for contracts in progress at the balance sheet date:
1. the aggregate amount of costs incurred and recognised
(less recognised losses) to date
2. the amount of advances received; and
3. the amount of retentions
Retentions are amounts of progress
billings, which are not paid until the satisfaction of conditions specified in
the contract for the payment of such amounts or until defects have been
rectified.
Progress billings are amounts billed for
work performed on a contract whether or not they have been paid by the client.
Advances are amounts received by the
contractor before the related work is performed.
An
enterprise should disclose:
(a. the gross amount due from clients for contract work as an asset; and
(b. the gross amount due to clients for contract work as a liability.
The gross amount due from clients for contract work is the net amount of:
(a. costs incurred plus recognised profits;
less
(b. the sum of recognised losses and progress
billings
for all
contracts in progress for which costs incurred plus recognised profits (less
recognised losses) exceeds progress billings.
The gross amount due to clients for contract work is the net amount of:
(a. costs incurred plus recognised profits;
less
(b. the sum of recognised losses and progress
billings
for all contracts in progress for which
progress billings exceed costs incurred plus recognised profits (less
recognised losses).
An enterprise discloses any
contingent liabilities and contingent assets in accordance with IAS 37
Provisions, Contingent Liabilities and Contingent Assets.
Contingent liabilities and
contingent assets may arise from such items as warranty costs, claims,
penalties or possible losses.
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