Percentage of completion method

[question removed by admin]

Why cant I solve for project 1 the same way they solved for project 2?

Because, prudence concept.

Forgive me, but I do not understand.

Recognise losses immediately, be conservative about recogntion of profit.

I understand that, but it seems that the method to solve the revenue generating project and loss generating project are different.

If you used the same method you used for profit, you’d have to recognise the loss over many periods which shouldn’t be so, according to the standards. So you just recognise the loss immediately(the difference between cost and amount to be received).