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B.13 CONSTRUCTION CONTRACTS
Construction contracts (hereafter also “contracts”) are reco-
gnised at the value agreed in the contract, in accordance with
the percentage of completion method, taking into account
the progress of the project and the expected contractual
risks. The progress of a project is measured by reference to
the contract costs incurred at the reporting date in relation to
the total estimated costs for each contract.
When the outcome of a contract cannot be estimated reliably,
the contract revenue is recognised only to the extent that the
costs incurred are likely to be recovered. When the outcome
of a contract can be estimated reliably, and it is probable that
the contract will be profitable, contract revenue is recognised
over the term of the contract. When it is probable that total
contract costs will exceed total contract revenue, the potential
loss is immediately recognised in the income statement.
The Group reports as an asset the gross amount due from
customers for construction contracts, where the costs
incurred, plus recognised profits (less recognised losses),
exceed the billing of work-in-progress; such assets are
reported under “Other receivables”. Amounts invoiced but not
yet paid by customers are reported under “Trade receivables”.
The Group reports as a liability the gross amount due to
customers for all construction contracts where billing of
work-in-progress exceeds the costs incurred plus recognised
profits (less recognised losses). Such liabilities are reported
under “Other liabilities”.
B.14 CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash, demand bank deposits
and other short-term investments, with original maturities of
three months or less. Current account overdrafts are classified
as financial payables under current liabilities in the statement
of financial position.