t contract inception, PFRS 15 requires an entity to determine how the performance obligations identified in the contract will be satisfied. According to PFRS 15, how does an entity satisfy a performance obligation in a long-term construction contract?  over time  at point in time  any time  over time or at point in time

Q: Based on the requirements and guidance of IFRS 15, one of the following is not considered part of…

A: Under the contract costing, there is an agreement made between two parties in respect of performing…

Q: . Defined by IFRS 2 as a vesting condition that requires the counterparty to complete a specified…

A: IFRS 2 talks about the reporting of share based payment transactions. As per this, the entities who…

Q: Demonstrate revenue recognition for long-term contracts, both at a point intime when the contract is…

A: Long term contracts usually qualify for revenue recognition over time. We recognise revenue over…

Q: Which of the following dictates how the revenue from the sale of production will be distributed:

A: Lease:   Lease is a contractual agreement whereby the right to use an asset for a particular period…

Q: The primary issue in the accounting for construction contracts is   the determination of the…

A: Construction contract:     It is the contract between the parties that include all details of…

Q: determining whether a contract is or contains a lease? from use of an identified asset throughout…

A: Hi student Since there are multiple questions, we will answer only first question. If you want…

Q: Which of the following costs shall from part of contract costs of long-term construction contract?…

A: Following is the answer to the given question

Q: f the Construction in Progress account is greater than the Contract Billings, the excess is treated…

A: Construction in progress means the contracts' work which still going on and is yet to be completed.

Q: When is an estimated loss on a long-term contract recognized, both for contracts that recognize…

A: Revenue recognized point of long term contract: A long-term contract qualifies for revenue…

Q: Unconditional rights to receive consideration because a performance obligation has been satisfied…

A: Introduction:- Accounts receivable should be recorded when no extra performance commitments are…

Q: Which of the following statements is not applicable to contract acquisition costs under ASC Topic…

A: In the given case all of the following statements is applicable to contract acquisition costs under…

Q: Identify the proper accounting for losses on long-term contracts.

A: Revenue recognition: Revenue recognition principle states that every business organization should…

Q: Which statement is true when the outcome of construction contract cannot be estimated reliably?…

A: As per AS-7, the accounting treatment of construction contract with respect to recognition of…

Q: Which one of the following situation where a performance obligation is satisfied over time ?  a-…

A: As per IFRS15 Performance obligation is satisfied over time if any of the following conditions are…

Q: In accounting for a long-term construction contract using the percentage of completion method, the…

A: Percentage of completion method requires reporting of revenue and expenses period by period basis.

Q: A provision shall be recognized when except * it is probable that an outflow of resources embodying…

A: A provision is an account set off for any obligation which can occur in future. In other words, a…

Q: Under PFRS 15, how does a consignor satisfy its performance obligation under consignment contract?…

A: SOLUTION-   EXPLANATION-  A PERFORMANCE OBLIGATION IS SATISFIED BY TRANSFERRING A PROMISED GOOD OR…

Q: age of time B. Completion of percentage of a project C. Performan

A: Revenue refers to the sum value of money gained by a business by selling its goods or services in…

Q: According to IAS 37 - Provisions, Contingent Liabilities, and Contingent Assets choose two of the…

A: IAS 37 is accounting standard which deals and provides guidelines about provisions and the…

Q: When the outcome of a construction contract cannot be estimated reliably, how shall contract revenue…

A: when the outcome of a construction contract can be estimated reliably, contract revenue and contract…

Q: Partial satisfaction of a multiple performance obligation is reported on the balance sheet asa.…

A: Performance obligation: A performance obligation is a promise made by a seller to transfer the goods…

Q: If the promise to grant a license is distinct and that the license provides the customer the “right…

A: Contract Account is a ledger created when a corporation enters into a long term agreement with the…

Q: Explain the doctrine of the indoor management rule in relation to a company entering into a…

A: It is often seen that the outsiders who contracts with the companies used to face…

Q: Identify the term being referred to: An agreement where one party conveys to the another party the…

A: The question contains an agreement between two parties . One party coveys the right to use the asset…

Q: What two methods are identified in the Codification as appropriate in accounting for long-term…

A: Long term Construction Contract Construction contract are in different type in accordance with need…

Q: For an SME, revenue shall arise on all of the following transactions and events except a. Sale of…

A: IAS 18 states that the revenue shall be aroused when the sale of goods or providing of service is…

Q: Under IFRS 15, when shall the incremental cost of obtaining a contract with a customer be recognized…

A: IFRS (International financial reporting standards) refer to a set of accounting guidelines and rules…

Q: A binding contract is created when a contractor submits a bid for a project O True O False

A: A binding contract is a contract where the parties to the contract are legally enforceable and the…

Q: Which of the following shall be excluded in the contract costs of a construction contract? * A.…

A: Contract costs should comprise:(a) costs that relate directly to the specific contract;(b) costs…

Q: How much must be shown as current asset (cost of uncompleted contract in excess of billings) in the…

A: Current Assets are the group of assets held by the business or a company for the purpose of regular…

Q: When it is probable that total contract costs will exceed total contract revenue, how shall the…

A: IAS 11 prescribes the contractor’s accounting treatment of revenue and costs associated with…

Q: What are the two basic methods of accounting for long term construction contracts? Indicate the…

A: Explain the two basic methods of accounting for long term construction contracts: The two basic…

Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…

A: Long term contracts are those contracts which are related to construction of building. Usually long…

Q: satisfied over time if: Group of answer choices The customer simultaneously receives and consumes…

A: A performance obligation refers to a promise to provide a different or unique good or service. it…

Q: #14  How should the balances of Progress Billings and Construction in Process be shown at reporting…

A: Introduction: Progress billing is a form of invoicing that ensures a consistent payment schedule…

Q: Under the completed-contract method,   Question 16 options: a revenue, cost, and gross profit are…

A: Under the completed-contract method,                     The total revenues, total costs incurred,…

Q: Under PFRS 15, in which of the following instances will the revenue from contracts with customers be…

A: Revenue is the amount which has been earned by the company during the period from the core…

Q: Any of the following criteria is considered satisfaction by an entity of performance obligation over…

A: As per IFRS 15, An entity transfers control of a good or service over time and, therefore, satisfies…

Q: What amount of RGP should be reported for the current year if the percentage of completion method is…

A: Answered:

Q: Define Contract . Identify and briefly discuss all the essential elements of a contract .

A: A legal contract is an agreement between two parties that creates mutual, legally enforceable…

Q: eives a contract to build a building to the performance of the contract is sum over

A: Given: To calculate the contract revenue amount in 2019 as,

Q: If the outcome of a long-term contract can be measured reliably, the preferred accounting method…

A: The percentage of completion method is an accounting technique in which long-term deed income and…

Q: . An entity has agreed to a three-year contract with a customer. Recognizing revenue from long-term…

A: As per IFRS15 Revenue recognition,  Revenue is to be recognized over a period of time if any one of…

Q: how long-term construction contract are accounted for and some of the issues that are faced for…

A: Long-term construction contract is reported in financial statements is as follows: At the end of…

Q: This method of accounting for long-term contracts has the advantage of recognizing project income…

A: Solution: Percentage of completion method of accounting for long term contracts has the advantage of…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.