When Using the Cost Recovery Method of Accounting for Long-Term

question 63

Multiple Choice

When using the cost recovery method of accounting for long-term contracts under IFRS:

• A)Estimated losses on the overall contract are recognized before the contract is completed.
• B)Expenses are recorded each period, but revenue is only recognized when the contract is completed.
• C)Companies can use the percentage-of-completion method if that is their preference.
• D)Neither gains nor losses are recognized until the contract is completed.

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