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(A) Eagle Limited has a three-year contract, at the 31 December 2030 the outcoene of the conlract cannot be reliably estimated. The cost incurred to dite is 512m, expected cost to completion is $168m and the contract price is $240m. The project is 16% cemplefte. A. this stage only 80% of the cost to date is deemed recoverable. REQUIRED: For the financial year ended 31 December 2019 explain to the directors of the company in the form of a memo, how the above contract will be treanod acootding to IFRS is. (6 marks) 4 QUESTION 6 (continued) (B) Bogue Construction Limited (BCL) is located it St. Mary, Jamuica. It started work on two construction projects during the year ended 31 December 2017. The nature of both contracts is that the customer controls the asset as the project goes forwand. Work is certified by a surveyor as performance obligations are completed. The following figures relate to two projects at the end of the reporting period. A sinkhole was discovered under the site for the Hopewell project and the costs of dealing with this have been taken into acoount in the calculation of estimated costs to completion. FCL's lawyers are virtually certain that the customer will have to bear the additional costs of $3,000,000 which will be incurred in stabilizing the land. Bogue Construction Limited recognizes revenues and profits on construction contracts on the basis of work certified to date. REQUIRED: a) Calculate the figures which would appear in FCL's financial statements in respect of these two projects for 2017 . (18 marks)

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