An entity has won a construction contract for $5 million. Work began on 1 November 20X1 and was 20 per cent complete on 31 December 20X1, the entity’s balance sheet date. The entity is confident that the contract will yield a profit. The contract was certified as complete by the customer on 31 August 20X2 and $4.5 million was received, the retention of 10 per cent being withheld for one year. The entity is confident that the retention will be received in full. Under IAS 11, what should be recorded as contract revenue in the income statement (prepared in March 20X2) of the entity for the year ended 31 December 20X1?

A. Nothing since the contract is completed in a period of less than one year.

B. Nothing, because the outcome of the contract could not be estimated reliably at such an early stage.

C. $1 million.

D. $0.9 million.