Construction contracts revenue over time or at a point in time? – In the this has been a enthusiastic discussion back and forth, and that is what it still is….
The rule: If the contract arrangements do not permit revenue to be recognised progressively, then revenue is recognised at a specific point in time on transfer of control, which for a construction contract will likely be close to completion.
The explanations: Should a contractor recognise revenue as construction work takes place or on practical completion?
While IFRS 15 was under development, a key concern of the construction industry was whether contractors would continue to recognise revenue as the contract progresses, similar to the stage of completion method … Read more