Accounting for construction contract under IAS 11 says that contract costs and estimated earnings in excess of billings occurred—in a contractor company which uses ‘percentage-of-completion method’—should be classified as an asset. If billings exceed costs and estimated earnings, the difference should be classified as a liability. So, what costs are incurred in a construction contract? How’s construction costs recognized and measured? What is Contract costs? Contract costs comprise costs that are identifiable with a specific contract, plus those that are [...]