When the outcome of a fixed-price contract cannot be reliably estimated,IFRS
A)permits firms to use either the completed contract method or the cost-recovery method to account for the contract.
B)rules do not permit firms to use the completed contract method.
C)follows the same accounting method required by U.S.GAAP.
D)permits considerable latitude when accounting for the contract.

Question

Quizplus · Accepted Answer

IFRS does not allow the use of the completed contract method. Instead, when the outcome cannot be reliably estimated, IFRS requires the use of the cost-recovery method.

When the Outcome of a Fixed-Price Contract Cannot Be Reliably