Ch11 - Revenue

Question 1

SoPL - Contract Revenue

Answer 1

Revenue (Total price x progress %)
Less: costs incurred to date

Less CoS recognised in previous years
Less revenue in previous years

Question 1

Progress of a contract:

Answer 1

Input method - cost incurred to date as a percentage of total expected costs = costs incurred/costs to complete or total costs*Revenue

Output method - based on value of work certified to date= Work certified/Revenue*Revenue

Question 2

SoFP - Contract Revenue

Answer 2

Revenue recognised to date
Less: Amount invoiced to date
= Contract asset or liability

Question 3

Total cost

Answer 3

Costs incurred + costs to complete (costs to complete includes remaining depreciation)

Question 4

If a Loss maker

Answer 4

Must recognise a balancing provision to get SoPL to match the total loss

Question 5

Revenue with service

Answer 5

Find total cost of servicing and minus of contract price

This is the revenue and add back time apportioned service costs

Question 6

Repurchase price less than original selling price

Answer 6

Lease

Question 7

Repurchase price higher than original selling price

Answer 7

Financing arrangement