Question: Question One Alloy Constructions Plc have just signed a five year contract to construct a 10,000 kilometers road for the federal government of Nigeria. The

Question One Alloy Constructions Plc have just signed a five year

Question One Alloy Constructions Plc have just signed a five year contract to construct a 10,000 kilometers road for the federal government of Nigeria. The CEO is undecided on the method to use to recognise profit and has solicited your advice as a financial consultant. Prepare a memo to him in line with the following outline: Identify the methods that can be used to recognise profit on a contract, mentioning their features ii. Explain the effect that the use of completed contract method on a long term project would have on the performance of a company. iii. Discuss the considerations that underlay the decisions on recognition of profit in a long term contract

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