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Income tax: property development: where the estimated profits method of recognising income from long-term construction contracts (Taxation Ruling IT 2450) is adopted, how is an estimated 'ultimate loss' arising under a contract to be recognised?

Notice of Withdrawal

TD 94/87 clarifies that where the estimated profits basis is used for recognising income from long-term construction contracts, an estimated contract loss is to be spread over the period taken to complete the contract and in a manner that reflects the progress of the contract.

TD 94/87 is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts.

The issue covered by TD 94/87 is now covered in Taxation Ruling TR 2017/D8.

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