Difference between revisions of "IAS11"

Latest revision as of 01:47, 20 August 2020

IAS 11 Construction Contracts* prescribes the contractor’s accounting treatment of revenue and costs associated with construction contracts. Work under a construction contract is usually performed in two or more accounting periods.

Consequently, the primary accounting issue is the allocation of contract revenue and contract costs to the accounting periods in which construction work is performed.

IAS 11 Construction Contracts* requires:

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract to be recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period; and
When the outcome of a construction contract cannot be estimated reliably:
- Revenue to be recognised only to the extent of contract costs incurred that is probable will be recoverable; and
- Contract costs to be recognised as an expense in the period in which they are incurred.

When it is probable that total contract costs will exceed the total contract revenue, the expected loss is recognised as an expense immediately.

IAS 11 Construction Contracts* is Copyright: IFRS Foundation

* Superseded by IFRS 15 Revenue.

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Hierarchy

ID	Name	Level	x
IFRS	International Financial Reporting Standards	0	IFRS
IAS11	IAS 11 Construction Contracts*	1	IAS11

Term(s)

ID	Name	Clear	x
IFRS15	IFRS 15 Revenue		IFRS15

IAS 11 Construction Contracts* International Financial Reporting Standards 10011 1 IAS, IFRS, Standard, Financial, Accounting IAS 11 prescribes the contractor’s accounting treatment of revenue and costs associated with construction contracts

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