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SSAP 9 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015.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