IAS11_06 - IAS 11 International Accounting Standard 11...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
IAS 11 © IASCF 833 International Accounting Standard 11 Construction Contracts
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
IAS 11 834 © IASCF C ONTENTS paragraphs INTERNATIONAL ACCOUNTING STANDARD 11 CONSTRUCTION CONTRACTS OBJECTIVE SCOPE 1–2 DEFINITIONS 3–6 COMBINING AND SEGMENTING CONSTRUCTION CONTRACTS 7–10 CONTRACT REVENUE 11–15 CONTRACT COSTS 16–21 RECOGNITION OF CONTRACT REVENUE AND EXPENSES 22–35 RECOGNITION OF EXPECTED LOSSES 36–37 CHANGES IN ESTIMATES 38 DISCLOSURE 39–45 EFFECTIVE DATE 46 APPENDIX: ILLUSTRATIVE EXAMPLES Disclosure of accounting policies The determination of contract revenue and expenses Contract disclosures
Background image of page 2
IAS 11 © IASCF 835 International Accounting Standard 11 Construction Contracts (IAS 11) is set out in paragraphs 1–46. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. IAS 11 should be read in the context of its objective, the Preface to International Financial Reporting Standards and the Framework for the Preparation and Presentation of Financial Statements . IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
IAS 11 836 © IASCF International Accounting Standard 11 Construction Contracts Objective The objective of this Standard is to prescribe the accounting treatment of revenue and costs associated with construction contracts. Because of the nature of the activity undertaken in construction contracts, the date at which the contract activity is entered into and the date when the activity is completed usually fall into different accounting periods. Therefore, the primary issue in accounting for construction contracts is the allocation of contract revenue and contract costs to the accounting periods in which construction work is performed. This Standard uses the recognition criteria established in the Framework for the Preparation and Presentation of Financial Statements to determine when contract revenue and contract costs should be recognised as revenue and expenses in the income statement. It also provides practical guidance on the application of these criteria. Scope 1 This Standard shall be applied in accounting for construction contracts in the financial statements of contractors. 2 This Standard supersedes IAS 11 Accounting for Construction Contracts approved in 1978. Definitions 3 The following terms are used in this Standard with the meanings specified: A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use. A fixed price contract is a construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which in some cases is subject to cost escalation clauses.
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/12/2011 for the course ECON 801 taught by Professor Brend during the Summer '11 term at Abu Dhabi University.

Page1 / 16

IAS11_06 - IAS 11 International Accounting Standard 11...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online