Page 195 - F2 Integrated Workbook STUDENT 2019

Revenue from contracts with customers

Step (3) Calculate the impact upon the current period statement of profit or
loss

Statement of profit or loss and other comprehensive income

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

costs.

––––
Gross profit x

––––

Loss making contracts

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

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

Cost of sales as a balancing figure is a short cut that will be
represented throughout these materials. . Strictly per the standard,
when a contract is loss making, the cost of sales is calculated by
reference to the stage of completion. A provision for an onerous
contract as per IAS 37 is then recorded to ensure the total anticipated
loss is immediately recognised within the statement of profit or loss.

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