Page 207 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Construction contracts

Example 10.1

Mane builds oil rigs for companies operating in the oil industry. Mane applies
IAS 11 Construction contracts.

The entity has three contracts in process at the year-end 30 April 20X1:

A B C
$000 $000 $000

Contract price 450 378 900
Work certified to date 338 252 180

Costs incurred to date 346 421 198
Estimated costs to complete 43 151 unknown
Progress billings 324 202 144

Required:

Prepare extracts from the financial statements for each of the three
projects, assuming that revenues and profits are recognised on the work
certified basis.

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