May be it helps
First- Revenu recognisations
Second -Profit and loss
third-Provision for loss
First.Revenu reconisations:
revenu Reconisations will be based on Completions of works
Complitions of works =Cost incured /cost incured +estimated cost
Example :
Contract cot =2500000
cost incured =1000000
estimated to be incured =1700000
Complitions %=1000000/1000000+1700000=37%
Profit and loss account:
Revenue (2500000*37%)=9250000
Less: cost incured =1700000
provision for loss=1319595
total loss=2094555
Calcolations of provision for loss:
=775000**63/.37
CAclubindia
