Degree of Completion= work done upto the date/Total Estimated cost for the Project*100

1.80Cr/3.2Cr*100=56.25%

Revenue should be recognised in the Books =3cr*56.25=1.6875Cr

Loss 1.8cr-1.6875Cr=0.1125Lakhs

can u plz xplain me how u got 3.2 cr 

@ sreenath can you explain what you have done

As per my opinion:-

If in the year end of 31st mar 2012 there is a notional profit(i.e. cr. balance in contract a/c ) and expected loss at end of contract (i.e. contract price 3cr and total expences is 3.2cr) then you shoul not recognized any profit just make only contingency reserve