Canada SFP reporting for Completed Contract construction projects


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Hi -

Very new to Accounting, and have a question about reporting on the SFP for construction in process, using the Completed Contract method.

If the amount billed exceeds the cost of Construction in Process, it is recorded as a liability, correct? How do we show this on the SFP?

Example: year ending 2012, Construction in Process = $2,000,000, Billings to date = $2,500,000. I assume we show $500,000 as a Liability called "Billings in excess of contract costs", but do we show the math (i.e. $2,000,000 - $2,500,000) in the Assets section as well?

I suppose what confuses me is the ongoing Liability that shows - but I guess this makes sense: if we've billed for more than we've provided, we do carry a liability (to complete the work billed for).

Thanks in advance!
 
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