Should the NET WIP (under billings and over billings) tie to back to my YTD NET Profit and Loss - Revenue (under billings and over billings) number? I am having a difficult time reconciling the balance sheet and profit and loss accounts against each other.
It's a construction company that has fixed-price projects and uses the percentage of completion method.
The response addresses the query posted in 354 words with APA references
//The construction companies follow International Accounting Standard 11 that contains the provisions for accounting treatment in the books of contractors. In this context, the following discussion has been made to explore the treatment of over and under billing in the construction contracts and find out the impact on the balance sheet. //
The query that the net WIP (under billings and over billings) should be tied back to year to date (YTD) net profit and loss account or not has been resolved with the help of an example. Suppose that 'Cost in Excess of Billing Account' (under billing) had a balance of $100 and another ...
The expert determines if NET WIP should tie to back YTD NET profit and losses. The response addresses the query posted in 354 words with APA references.