The case “Aren’t We Done Yet” was about a contract between two companies, LabCo and Halibut who entered into a fixed price contract and as trouble arose we were asked to determine several things. First of all we were asked based on the facts of the case was LabCo’s accounting policy for revenue treatment reasonable. Secondly was it appropriate for LabCo to change its accounting policy as complications started cause the price of the project to rise. And lastly if LabCo is contemplating adopting IFRS in the coming year how could this affect their current accounting policy on for revenue recognition.
LabCo, a large construction contracting firm that serves large industrial customers entered into a contract with Halibut. The agreed contract