Facts
XYZ, Inc. is negotiating with the local government to build a new bridge after demolishing the existing bridge in downtown near the city center. At the initial meeting, it was indicated that the government would not be willing to pay for both components of the contract an amount exceeding $100,000. The government representatives insisted that separate proposals would need to be submitted and negotiated and that the contractor should maintain separate records for each component of the contract and upon re separate proposals, it was agreed that the split of the contract price of $100,000 would be in the ratio of 70% for construction of the new bridge and 30% for demolishing the existing bridge
Required
Evaluate in light of the provisions of IAS 11 whether the contract for the construction of the new bridge and the contract for demolishing the existing bridge should be segmented and treated as separate contracts or be combined and treated as a single contract.