Nice explanation. My one question is that SIR ,,,you have received Mobilization advance and you have purchased some material as per your BOQ but you didnt start work at site until end of particular year....Will you calculate your P&L at the end of that particular year?
You got the contract, this is understood. Advance received is a liability. You purchased some materials but didnt start work, so this is not related to client yet. These materials are in your inventory and you can use them on this or any other projects, so it is your inventory and not yet related to this project. Revenue zero, COS zero ... Nothing in PnL. Contract Liability in SODP which is equal to advance received.
Should intercompany recharges (not invoiced) be considered as contract asset/liabilities? For example a shared service center provides accounting services to the parrent company, incures 100kEUR costs per month, according to the agreement can invoice this amount to the parrent, but invoices only the next month. Is this a contract asset untill it is not invoiced, or a plain recharge incom accrual.
Great, In Simple Words Precisely Explain
Thanks a lot
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Wonderful sir thank for clear detailed explanation ❤
You are most welcome
Excellent explanation, really sorts out what I've been confused about. Thanks and best wishes to you, sir 😍
Glad it helped
thanks a bunch teacher
Thank you for this. Really helpful
Glad it was helpful!
Thanks for the video. So does it means that we no longer can account for Work/construction in Progress as a revenue?
WiP which is verified is recognized as Revenue, even if the job is not completed or invoice is not issued.
Hey Sir , Revenue Under IFRS 15 could be calculated using Input Method or Output Method Right?
Yes, both are possible.
Thank you so much!!! It helps a lot👍
Good luck dear.
Nice explanation. My one question is that SIR ,,,you have received Mobilization advance and you have purchased some material as per your BOQ but you didnt start work at site until end of particular year....Will you calculate your P&L at the end of that particular year?
You got the contract, this is understood. Advance received is a liability. You purchased some materials but didnt start work, so this is not related to client yet. These materials are in your inventory and you can use them on this or any other projects, so it is your inventory and not yet related to this project.
Revenue zero, COS zero ... Nothing in PnL.
Contract Liability in SODP which is equal to advance received.
@@VertexLearningSolutionsLLC thanks for your help SIR.
Should intercompany recharges (not invoiced) be considered as contract asset/liabilities? For example a shared service center provides accounting services to the parrent company, incures 100kEUR costs per month, according to the agreement can invoice this amount to the parrent, but invoices only the next month. Is this a contract asset untill it is not invoiced, or a plain recharge incom accrual.
Even If it is not invoiced
We must recognize it. Dr to contract asset and Cr. Income
@@VertexLearningSolutionsLLC thank you!