Q&A

Is IAS 11 still applicable?

Is IAS 11 still applicable?

IAS 11 Construction Contracts prescribes the accounting treatment of revenue and costs associated with construction contracts. Revised December 1993. Withdrawn for periods starting on or after 1 January 2018 when IAS 11 is superseded by IFRS 15 Revenue from Contracts with Customers.

Did IFRS 15 replace IAS 18?

IFRS 15 Revenue from Contracts with Customers You’ll need to apply IFRS 15 for reporting periods beginning on or after 1 January 2018 (early application permitted); IFRS 15 will replace the following standards and interpretations: IAS 18 Revenue, SIC 31 Revenue – Barter Transaction Involving Advertising Services.

What replaced IAS 18?

Effective 1 January 1995. Withdrawn for periods starting on or after 1 January 2018 when IAS 18 is superseded by IFRS 15 Revenue from Contracts with Customers.

What is revenue according to IAS 18?

IAS 18 addresses when to recognise and how to measure revenue. Revenue is the gross inflow of economic benefits during the period arising from the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.

What is the difference between IFRS 15 and IAS 18?

Click here to check it out! IFRS 15 contains guidancefor transactions not previously addressed (service revenue, contract modifications); IFRS 15 improves guidance for multiple-element arrangements; IFRS 15 requires enhanced disclosuresabout revenue. Five-Step Model Framework

What is the objective of IAS 11.3?

The objective of IAS 11 is to prescribe the accounting treatment of revenue and costs as­so­ci­ated with con­struc­tion contracts. What is a con­struc­tion contract? A con­struc­tion contract is a contract specif­i­cally ne­go­ti­ated for the con­struc­tion of an asset or a group of in­ter­re­lated assets. [IAS 11.3]

What are the accounting guidelines for IAS 18?

IAS 18 provides accounting guidelines to record revenue generated from the following activities. Revenue arising from selling goods is considered here; thus, this type of revenue is recognized by manufacturing organizations.

When is revenue recognition required in IAS 11?

Therefore IAS 11 basically requires that, where the outcome of a construction contract can be recognised reliably, revenue on such contracts should be recognised according to the stage of completion of the contract (7) .