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CONSTRUCTION CONTRACTS
INTRODUCTION
Identifying
Measuring
Communicating economic information
ACCOUNTING STANDARD
It Comprises:
Initial amount agreed
Variations in the contract work, claims and
incentive payments to the extent it is
probable that they will result in revenue and
can be measured.
Contract Revenue
A variation is an instruction by the customer for a
change in the scope of the work to be performed
under the contract.
A claim is an amount that the contractor seeks to
collect from the customer or another party as
reimbursement for costs not included in the contract
price.
Incentive payments are additional amounts payable
to the contractor, if specified performance standards
are met or exceeded.
Contract Costs
It comprises of :
Direct Costs
Attributable Costs
Specifically chargeable costs as per the terms
of the contract.
Recognition of contract
Revenue & expenses