IFRS 15 application for accounting of revenue from construction contracts
Article Sidebar
Main Article Content
Abstract
Construction, like any industry, has its own specifics, which should be taken into account when organizing the accounting work of an enterprise. In addition to material consumption, labor intensity and risks, construction is characterized by a long production cycle, which largely determines the financial and economic flows of a construction organization. It is common in the construction industry to provide a variety of services for a single customer or to related parties of a customer. A construction company, in addition to the construction services, can also be hired to provide design services, project management, consulting, supervision, engineering survey, design, installation, commissioning and other types of work. The article is devoted to the problems of IFRS 15 application for proceeds accounting under construction contracts. The article discusses the specifics of accounting organization for income and expenses in the construction industry. 5 steps of the revenue accounting model are considered, a step-by-step procedure for working with contracts to recognize revenue. The article outlines a mechanism for recognizing revenue and allocating expenses. The article notes that, despite the complexity of IFRS 15, its new application improves the accounting system for income and expenses of construction companies and solves the problem of recognizing revenue and the financial result determination in construction. Owing to the control system contained in IFRS 15, construction companies can incrementally enhance their revenue recognition accounting system and remove the customer risks related to contracts.
Downloads
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
1. Proposal of Policy for Free Access Periodics
Authors whom publish in this magazine should agree to the following terms:
a. Authors should keep the copyrights and grant to the magazine the right of the first publication, with the work simultaneously permitted under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 that allows the sharing of the work with recognition of the authorship of the work and initial publication in this magazine.
b. Authors should have authorization for assuming additional contracts separately, for non-exclusive distribution of the version of the work published in this magazine (e.g.: to publish in an institutional repository or as book chapter), with recognition of authorship and initial publication in this magazine.
c. Authors should have permission and should be stimulated to publish and to distribute its work online (e.g.: in institutional repositories or its personal page) to any point before or during the publishing process, since this can generate productive alterations, as well as increasing the impact and the citation of the published work (See The Effect of Free Access).
Proposal of Policy for Periodic that offer Postponed Free Access
Authors whom publish in this magazine should agree to the following terms:
a. Authors should keep the copyrights and grant to the magazine the right of the first publication, with the work simultaneously permitted under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 [SPECIFY TIME HERE] after the publication, allowing the sharing of the work with recognition of the authorship of the work and initial publication in this magazine.
b. Authors should have authorization for assuming additional contracts separately, for non-exclusive distribution of the version of the work published in this magazine (e.g.: to publish in institutional repository or as book chapter), with recognition of authorship and initial publication in this magazine.
c. Authors should have permission and should be stimulated to publish and to distribute its work online (e.g.: in institutional repositories or its personal page) to any point before or during the publishing process, since this can generate productive alterations, as well as increasing the impact and the citation of the published work (See The Effect of Free Access).
d. They allow some kind of open dissemination. Authors can disseminate their articles in open access, but with specific conditions imposed by the editor that are related to:
Version of the article that can be deposited in the repository:
Pre-print: before being reviewed by pairs.
Post-print: once reviewed by pairs, which can be:
The version of the author that has been accepted for publication.
The editor's version, that is, the article published in the magazine.
At which point the article can be made accessible in an open manner: before it is published in the magazine, immediately afterwards or if a period of seizure is required, which can range from six months to several years.
Where to leave open: on the author's personal web page, only departmental websites, the repository of the institution, the file of the research funding agency, among others.
References
Alotibi, N. (2018). International Financial Reporting Standard (IFRS) 15 Revenue from Contracts with Customer. Journal of Internet Banking and Commerce, 23(3), 1-9.
Konvisarova, E. V., Levchenko, T. A., & Pustovarov, A. A. (2020). Problems Of Statistical Accounting In Russian Price Index Determination. Reice-Revista Electronica De Investigacion En Ciencias Economica, 8 (15), 272-285. doi: 10.5377/reice. v8i15.9958.
Krasova, E. V., Klindukh, R., Krasko, A. (2018). Cyclicality of innovative development in entrepreneurship. Amazonia Investiga, 7 (17), 21-30.
Miroshnikova, T., & Taskaeva N. (2018). Model for assessing the financial potential of the region. International Scientific Conference on Business Technologies for Sustainable Urban Development (SPbWOSCE). 170. 1042. doi: 10.1051/matecconf/201817001042.
On approval of the Accounting Regulation "Accounting for construction contracts" (PBU 2/2008): The Order of the RF Ministry of Finance (24.10.2008) No. 116n (as amended on 06.04.2015) (Registered in the Ministry of Justice of Russia on 24.11.2008 - No. 12717) // LRS "Consultant Plus". - Access mode: http://www.consultant.ru/document / cons_doc_LAW_82067 / (reference date 02.22.2021).
Regulation on accounting 18/02 "Accounting for corporate income tax calculations": The Order of the RF Ministry of Finance No. 114n issued on November 19, 2002 (as amended on November 28, 2018) (Registered with the Ministry of Justice of Russia on December 31, 2002 - No. 4090) // RLS "ConsultantPlus". - Access mode: http://www.consultant.ru/document / cons_doc_LAW_40313 / (reference date 02.22.2021).
Regulation on accounting 9/99 "Organization income": The Order of the RF Ministry of Finance No. 32n (06.05.1999) (as amended on 04/06/2015) (Registered in the Ministry of Justice of Russia on 05/31/1999 - No. 1791) // RLS "ConsultantPlus". - Access mode: http://www.consultant.ru/document/cons_doc_LAW_6208/ (reference date 02.22.2021).
Tax Code of the Russian Federation: The Law of the Russian Federation No. 146-FL on July 31, 1998. (as amended on 11/23/2020); Part II: The Law of the Russian Federation No. 117-FL on 08/05/2000 (as amended on 12/29/2020) // RLS ConsultantPlus. - Access mode: http://www.consultant.ru/document/cons_doc_LAW_28165/ (reference date 02.22.2021).
Terentyeva, T. V., Konvisarov,a E. V., Levchenko, T. A., & Borovitskaya, M. V. (2018). Theoretical and methodical approaches for control introduction in the management system of industrial organization. Amazonia Investiga. 7 (14), 50-60. Retrieved from https://www.amazoniainvestiga.info/index.php/amazonia/article/view/470.
Terentyeva, T. V., Vasilenko, M. V., & Titova, N. Y. (2019). Organizational and economic mechanism for sustainable development of Fishing Industry of the Primorsky territory: Cluster Approach. Dilemas Contemporaneos-Educacion Politica Y Valores. 6, 132-145.
Varkulevich, T. V., & Bubnovskaya T. V. (2020). Mechanism of transformation of the financial reporting of companies-participants of international markets in the format of IFRS: practical aspects. Azimuth of Scientific Research: Economics and Administration, 9(3), 97-101.
Vasilenko, M., & Titova, N. (2019). Accounting policy the system of enterprise economic security. Amazonia Investiga, 8(22), 254-260. Retrieved from: https://amazoniainvestiga.info/index.php/amazonia/article/view/424.