Problem
A company commenced work on the construction of a significant asset for one of its customers on 1 May 20X5. Construction is scheduled to run for two years and the total contract price is $5m.
At 31 December 20X5 the following details are obtained in relation to the contract:
Percentage complete as at 31 December 20X5 50%
Amounts Invoiced to customer $1.7m
Amounts received from customer $0.8m
What is the total amount that should be Included in the statement of financial position as at 31 December 20X5 as a contract asset or contract liability?