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
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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.

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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
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