Procentní metoda rozpoznávání zisku a tr*eb

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Úvod do procentní metody
rozpoznávání zisku a tržeb
FIR 2013
Profit recognition in construction
KEY BALANCE SHEET ACCOUNTS (CASH BASIS)
KEY BALANCE SHEET ACCOUNTS USING THE BILLINGS METHOD
• Accounts receivable, accounts payable, and inventory accounts are basic
items reported in the balance sheet when using the accrual-billings
method. In addition, an account is utilized to reflect WORK IN PROGRESS
that has not been billed. Such an account would embrace payrolls paid,
materials installed, and other project costs that have not yet
been billed to the client. These expenses are considered to be a current
asset and are summarized in the account called work in progress.
POC method of profit and revenues recognition
KEY ACCOUNTS USING THE POC METHOD
In the case of the percentage-of-completion method, the key balance sheet accounts
must account for the amount of underbilling and overbilling.
• Underbilling is a situation in which the value earned (based on POC) exceeds the amount
billed,
• generating an asset Overbilling is a situation in which the value earned (based on POC) is
less than the amount billed, generating a liability.
The POC method provides for recognition of income (on the basis of earned value)
at the end of each accounting period. Revenues are recorded in the project billings
account and expenses in the work in progress account as work progresses.
At the end of each accounting period, income flows for all projects appear on the
income statement and the balance sheet when the POC method is used. The accounts
to reflect overbilling or underbilling on projects are updated at the end of each
accounting
period.
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