Page 192 - F2 Integrated Workbook STUDENT 2019
P. 192

Chapter 7




               1.8.1  Accounting for revenue recognised over time

               Revenue is recognised over time based on the progress towards completion.

               Use a 4 step approach

               STEP (1) Determine if overall contract is PROFITABLE (looking out for loss making
               contracts).

               STEP (2) Determine the contracts’ PROGRESS TOWARDS COMPLETION.

               STEP (3) Calculate the impact upon the current period STATEMENT OF PROFIT
               OR LOSS.

               STEP (4) Calculate balances as at the reporting date on the STATEMENT OF
               FINANCIAL POSITION.























































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