% of Completion Value of work certified/Total contact price

or

Costs incurred to date/Total contract costs

EXAMPLE 1

W1. Outcome of the Contract $m

Total contract price 125
Total contract costs 75
Total expected profit 50

w2. Degree of completion

% of comp Cost incurred to date/Total contract costs
40%

SOPL for the year ended 30 sep 2004

Revenue 50
Cost of sales ( Bal fig) -30
Profit 20

SOFP as at 30 Sep 2004

Current assets
Receivable 12
Contract asset 28

w3. Contract asset/(liability)

Costs incurred to date 30
Add attributable profits 20
Less amounts invoiced to customers -22
Contract asset 28

EXAMPLE 2

W1. Outcome of the contract $

Total contract price 240000
Total contract costs 264000
Total expected loss -24000

SOPL for the year ended 31 Dec 2015

Revenue 84000
Cost of sales (Bal fig) 108000
Loss -24000

SOFP as at 31 Dec 2005

Current assets
Receivable 0
Contract asset 2400

w2. Contract asset/(liability)

Costs incurred to date 103200
less loss expected -24000
less amounts invoiced to customers -76800
asset 2400