IASB (2011)Revenue from Contracts with Customers Specifies the Accounting Treatment

question 21

Multiple Choice

IASB (2011) Revenue from Contracts with Customers specifies the accounting treatment in the case that the outcome of a construction contract cannot be reliably assessed.The treatment specified is:

• A)(a) Contract costs must be deferred and matched against revenues in the financial year in which they are recognised where it is not probable that the costs will be recovered in the current period; and (b) where it is probable that the costs will be recovered in the current period, revenue must be recognised only to the extent of the costs incurred.
• B)(a) Construction costs must be recognised as a contra asset in the financial year in which they are incurred and set-off against the receivable recorded on the contract; and (b) where the receivable is less than the accrued costs, the difference must be written off as an expense in the period.
• C)(a) Contract costs must be recognised as an expense in the financial year in which they are incurred; and (b) where it is probable that the costs will be recovered, revenue must be recognised only to the extent of the costs incurred.
• D)(a) Construction costs must be accrued and reported as a deferred asset to the extent that it is considered probable that the costs will be recovered; and (b) revenue may be recognised only to the extent of the costs incurred.

Comprehend the concept and legal considerations of Do Not Resuscitate (DNR) orders.

Recognize the impact of eliminating major diseases on life expectancy.

Understand the role and importance of hospice and home care for the terminally ill.

Differentiate between various forms of euthanasia and assisted suicide.

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Definitions:

Consideration of Marriage

Consideration of marriage is the legal or moral obligation taken into account when entering into a marriage contract, often involving mutual promises or agreements that form the basis of the relationship.

Money Judgment

A court order requiring one party to pay a sum of money to another party as compensation for losses or damages.

Interpretation of Contracts

The process of determining the meaning and intent behind the written terms of a contract by examining its language, context, and the parties' intentions.

Technical Terms

Specialized vocabulary associated with a specific field of study, profession, or activity, used to communicate precisely within that context.