Page 205 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Construction contracts

Step (3) Calculate the figures for the current period statement of profit or loss

Profitable contracts

[Completion % (step 2) × contract price] – previously
Revenue x
recognised revenue.
[Completion % (step 2) × total costs] – previously
Cost of sales (x) recognised costs.
––––
Gross profit x
––––

Loss making contracts

[Completion % (step 2) × contract price] – previously
Revenue x
recognised revenue.
Cost of sales (x) β

––––
Gross profit X Total loss from step (1) recognised immediately.
––––

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