Recognition of revenue under contract with buyers in construction

Abstract

The article highlights issues of revenue recognition in construction companies in accordance with
IFRS 15. The main provisions of IFRS 15 were considered, including the revenue recognition model in accordance
with the requirements of the standard. The main objective of IFRS 15 is to improve the presentation of the
performance of companies in the financial statements, and in particular in the Statement of Profit and Loss and
Other Comprehensive Income. This improvement is achieved by ensuring comparability of the performance
of companies around the world, as the standard recommends the use of a single basis for revenue recognition,
regardless of industry specifics. Construction companies, according to experts, will feel the «strongest effect»
as they «enter into contracts with variable terms.» The article highlights some issues related to the recognition
of revenue under IFRS 15. It considers ways in which the revenue recognition rules reduce the subjectivity of
revenue recognition under IFRS 11.