Question 2 a. The problem of how and when to account for revenue on long term contracts has been an issue for many years. Evaluate the approach taken by IFRS 15 (Revenue from Contracts with Customers) to permit revenue to be recognised over time on a contract. (7 Marks) Zulfar Holdings Lid is a construction company that specialises in building electricity generating stations powered by wind turbines. In April 2021, Zulfar Holdings Lid won new contracts to build an electrity generation station in Fiji and a very large wind farm instilation in Australia, both contracts meet the criteria for performance conditions to be met over time. Fiji Contract The contract was for a total value of $125 Million. The OUTPUT method is to be used for calculating contract revenue, with the value of work performed being determined by qualified architects. The building work has unfortunately had a number of problems. You are given the following information regarding the performance of the contract at 31 March 2022 and 2023. 31 March 31 March 2022 2023 $'000 $'000 Certified Level of Revenue 48.000 1 18.000 Costs Incurred to date 52,000 126.500 Estimated costs to complete 83,000 9.000 Cumulative progress billings 42,000 117.000 Australia contract This division won a contract for $150 Million to build a new road and rail bridge. The INPUT method is to be used for calculating contract revenue. You are given the following information regarding the contract at 31/12/19 and 31/12/20. 31 March 31 March 2022 2023 $'000 $'000 Costs Incurred to date 52.000 98.250 Estimated costs to complete 78,000 32,750 Cumulative progress billings 58,000 110,000 30'C Light rainRequired: b. Calculate the revenue, profit and statement of financial position balance for the Fiji contract for the years ending 31 March 2022 and 2023. (9 Marks) C. Calculate the revenue, profit and statement of financial position balance for the Australia contract for the years ending 31 March 2022 and 2023. (9 Marks) (Total: 25 marks) W 30'C Light rain