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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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  • 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. 

Which version of the standard?

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The following UITF Abstracts refer to SSAP 9

Current proposals

FRS 100 was issued in November 2012. The standard establishes rules on how to select the appropriate accounting framework for a particular entity. Depending on factors such as size and whether they are listed, UK entities will apply one of:

  • EU-adopted IFRS
  • FRS 101 Reduced Disclosure Framework (EU-adopted IFRS, with some amendments in order to comply with the Companies Act and reduce disclosure requirements)
  • FRS 102 (One standard which will replace existing SSAPs, FRSs and UITF Abstracts)
  • A modified FRSSE

The new UK GAAP is effective for periods beginning on or after 1 January 2015, with earlier adoption permitted.

This page was last updated 4 December 2012