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SSAP 9 Stocks and long term contracts

Issued May 1975. Revised September 1988. Effective 1 July 1988.

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SSAP 9 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:


  • Stocks should be stated at the lower of cost and net realisable value.
  • Long term contracts should be assessed on a contract by contract basis and turnover and related costs recognised as activity progresses.
  • Where the contract outcome can be assessed with reasonable certainty prudently calculated profit should be recognised in the profit and loss account as the difference between turnover and related costs.
  • In the balance sheet turnover in excess of payments on account should be classified as "amounts recoverable on contracts".
  • Any excess of payments on account should be classified as such within creditors.
  • The amount classified within stocks as long term contracts is costs incurred less amounts transferred to cost of sales less foreseeable losses and payment on account not matched with turnover.
  • Any foreseeable loss should be recognised immediately in the profit and loss account. 

Last updated 21 June 2015