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construction /
long-term contracts (standard
IFRS 15)
Contract revenues
Contract costs
Examples
Contract revenues
Contract costs
Examples
Contract revenues
Contract costs
Examples
Costs that relate directly to a contract and which are incurred in securing the contract are
also included as part of the contract costs if:
they can be separately identified and
measured reliably and
it is probable that the contract will be obtained
The costs of securing a contract which have been expensed in prior periods should not be
included in contract costs
Contract revenues
Contract costs
Examples
Contract revenues
Contract costs
Examples
• As of end of 2016:
• The percentage of completion is 500/2000 = 25%
• The recognized revenues are 3000*25%=750
• The revenue has to be accounted for in « revenues on long term contracts » (in P&L in account D7020 or
D7030) and on receivables on long term contracts (in B/S in account A41000)
CHANGE OF ESTIMATES
• Estimates as of end of 2017:
• Actual costs for the period are 400
• Estimated costs at completion are now 2500 (change of estimate)
• Estimated revenues at completion are still 3000
• As of end of 2017:
• The percentage of completion is: (500+400)/2500 = 36%
• The cumulated recognized revenues are 3 000 * 36% = 1 080
• The revenues for 2007 are 3 000 * 36% - 750 = 330
• As of end of 2018:
• The percentage of completion is: (500+400+800)/4000 = 42,5%
• The recognized revenues are 3000*42,5% - 750 – 330 = 195
• The estimated loss at completion is 4000-3000 = 1000
• A provision for loss at completion shall be accounted for the remaining costs until the end of the contract: 1000 *
57,5%= 575
IAS 11