F2 - Long-Term Construction Contracts Flashcards
1
Q
Identify two methods of revenue recognition for long-term construction-type contracts under U.S. GAAP and IFRS.
A
U.S. GAAP
- Percentage-of-completion
- Completed-contract
IFRS
- Percentage-of-completion
- Cost recovery
2
Q
For long-term construction-type contracts, when are losses recognized?
A
Immediately when discovered, regardless of the end method used for revenue recognition.
3
Q
State the formula for recognizing the gain/loss on long-term construction-type contracts under the percentage-of-completion method.
A
_ Total cost to date _ X Total est. gross profit
Total esttimated cost of contract
- Gross profit recognized to date