Under the provisions of TMS 11, when it is probable that total contract costs will exceed total contract revenue, the expected loss shall be recognised as an expense immediately. Therefore, if a company estimates that it will incur a loss on construction contract, it should immediately recognize that loss in full. This treatment is in line with conservatism principle of accounting. The purpose of this study is to exemplify recognition of loss on construction contracts under percentage of completion method with the help of a case
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