Issued May 1975. Revised September 1988. Effective 1 July 1988.
SSAP 9 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and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
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.