At 30 September 2003, Bowtock had included in its draft statement of financial position inventory $250 000
Question:
Bowtock is part way through the construction of a housing development. It has prepared its financial statements to 30 September 2003 in accordance with IAS 11, Construction Contracts, and included a proportionate amount of the total estimated profit on this contract. The same legislation, referred to above (in force from 5 November 2003), now requires modifications to the way the houses within this development have to be built. The cost of these modifications will be $500 000 and will reduce the estimated total profit on the contract by that amount, although the contract is still expected to be profitable.
Required:
Assuming the amounts are material, state how the information above should be reflected in the financial statements of Bowtock for the year ended 30 September 2003.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For
International Financial Reporting and Analysis
ISBN: 978-1408075012
5th edition
Authors: David Alexander, Anne Britton, Ann Jorissen
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