IFRS Revenue Recognition For Construction Contracts

Learning Objectives

• To recognize the objective of IFRS for Construction Contracts.
• To establish the principles that an entity must apply to report useful information to users of financial statements.
• To discuss about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.
• To know how to account for contract costs.
• To explain how assets are recognized with a contract with a customer.

Course Description

The core principle of IFRS for Construction Contracts is that an entity must recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

An entity must consider the terms of the construction contract and all relevant facts and circumstances when applying this IFRS. An entity must apply this IFRS, including the use of any practical expedients, consistently to contracts with similar characteristics and in similar circumstances.

An entity must recognize the consideration received from a customer as a liability. Depending on the facts and circumstances relating to the contract, the liability recognized represents the entity’s obligation to either transfer goods or services in the future or refund the consideration received. In either case, the liability must be measured at the amount of consideration received from the customer.

How do you do all this, exactly?

This online CPE webinar covers the following key topics:

• Identifying the contract.
• Combination of contracts.
• Contract modifications.
• Identifying and satisfaction of performance obligations.
• Measurement of construction contract revenue.
• Applying transaction price changes.
• Apply amortization and impairment.
• Review defined terms.
• Examples of construction contract revenue recognition.
• Disclosure requirements.
• Financial statement presentation.

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Overview

• IFRS Qualitative characteristics

  3 mins
• What does this IFRS not apply to?

  13 mins
• Measurement of revenue

  24 mins
• Construction Contract specifies

  41 mins
• Construction contracts

  61 mins
• When expected construction contract Loss

  81 mins