Contract Disclosures :
A contractor has reached the end of its first year of operations. All its contract costs incurred have been paid for in cash and all its progress billings and advances have been received in cash. Contract costs incurred for contracts B, C and E include the cost of materials that have been purchased for the contract but which have not been used in contract performance upto the reporting date. For contracts B, C and E, the customers have made advances to the contractor for work not yet performed.
The status of its five contracts in progress at the end of year 1 is as follows:
Contract
(amount in Rs. lakhs)
A | B | C | D | E | Total | |
Contract Revenue recognised in accordance with paragraph 21 | 145 | 520 | 380 | 200 | 55 | 1,300 |
Contract Expenses recognised in accordance with paragraph 21 | 110 | 450 | 350 | 250 | 55 | 1,215 |
Expected Losses recognised in accordance with paragraph 35 | __ | __ | __ | 40 | 30 | 70 |
Recognised profits less recognised losses | 35 | 70 | 30 | (90) | (30) | 15 |
Contract Costs incurred in the period | 110 | 510 | 450 | 250 | 100 | 1,420
|
Contract Costs incurred recognised as contract expenses in the period in accordance with paragraph 21 |
110 |
450 |
350 |
250 |
55 |
1,215 |
Contract Costs that relate to future activity recognised as an asset in accordance with paragraph 26 |
60 |
100 |
_ |
45 |
205 |
|
Contract Revenue (see above) |
145 | 520 | 380 | 200 | 55 | 1,300 |
Progress Billings (paragraph 40) | 100 | 520 | 380 | 180 | 55 | 1,235 |
Unbilled Contract Revenue | 45 | __ | __ | 20 | __ | 65 |
Advances (paragraph 40) | __ | 80 | 20 | __ | 25 | 125 |
The amounts to be disclosed in accordance with the Standard are as follows:
Contract revenue recognised as revenue in the period [paragraph 38(a)] | 1,300 |
Contract costs incurred and recognised profits (less recognised losses) upto the reporting date [paragraph 39(a)] |
1,435 |
Advances received [paragraph 39(b)] | 125 |
Gross amount due from customers for contract work— presented as an asset in accordance with paragraph 41(a) |
220 |
Gross amount due to customers for contract work— presented as a liability in accordance with paragraph 41(b) |
(20) |
The amounts to be disclosed in accordance with paragraphs 39(a), 41(a) and 41(b) are calculated as follows:
(amount in Rs lakhs) |
||||||
A | B | C | D | E | Total | |
Contract Costs incurred | 110 | 510 | 450 | 250 | 100
|
1,420
|
Recognised profits less | 35 | 70 | 30 | (90) | (30) | 15 |
145 | 580 | 480 | 160 | 70 | 1,435
|
|
Progress billings | 100 | 520 | 380 | 180 | 55 | 1,235
|
Due from customers | 45 | 60 | 100 | __ | 15 | 220 |
Due to customers | _ | _ | _ | (20) | — | (20) |
The amount disclosed in accordance with paragraph 39(a) is the same as the amount for the current period because the disclosures relate to the first year of operation.