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How do we recognize revenue for ongoing project/ incomplete project in a construction company when we prepare a quarterly financial statement?

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Question added by Mohamed Hakeem Meerashahib , Branch Manager , Sri Lanka State Trading (General) Corporation
Date Posted: 2016/01/20
Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

I think it must be as per Percentage of Completion (POC) method (IAS)

Hamzath Hameed
by Hamzath Hameed , Finance Manager , BlueLake Insurance Brokers

As per IAS,

If the outcome of contract reliably measured, recognize cost & revenue on the basis of stage of completion method.  

If the outcome of contract can not reliably measured, revenue should be recognized to the extent of cost considered to be recoverable.

essmat ali ezzat mohamad soliman
by essmat ali ezzat mohamad soliman , مدير مالى , مصنع الخليج للتعبئة والتغليف

. percentage from Completion rate of total project 

mohamed Alsherif
by mohamed Alsherif , finance manager , alfouzan construction comany

by percentage from Completion rate of total project

actual cost till the FS over the total estimated cost fro the project the multiplied to contract amount

Shaun Haribance
by Shaun Haribance , Senior accountant , Nasser Lootah Real Estate

Where revenue is received over the passage of time, the percentage of completion method should be used. This method should only be used if :

 

Revenue can be measured reliably  ;

Cost to be incurred can be measured reliably ;

Its probable that future economic benefits will flow to the seller and

The % of completion at balance sheet date can be estimated reliably

 

only when the above conditions are met, revenue can be recognized

 

 

 

 

 

 

  • he amount of revenue can be measured reliably;

 

  • it is probable that the economic benefits will flow to the seller;

 

  • the stage of completion at the balance sheet date can be measured reliably; and

 

  • the costs incurred, or to be incurred, in respect of the transaction can be measured reliably.

 

  • he amount of revenue can be measured reliably;

 

  • it is probable that the economic benefits will flow to the seller;

 

  • the stage of completion at the balance sheet date can be measured reliably; and

 

  • the costs incurred, or to be incurred, in respect of the transaction can be measured reliably.

 

 

MOHAMED MUFASSAL FOUZUL NAWAZ
by MOHAMED MUFASSAL FOUZUL NAWAZ , Finance Manager , A to Z Textile Mills Ltd

AS A % OF COMPLETION OF TOTAL PROJECT

Thomas Mammen
by Thomas Mammen , Chief Staff - Accounts & Finance , National Pipe Co. Ltd.

We can recognize revenue from an ongoing project on the percentage of  completion basis or completed contract basis,  if its realizable at that particular stage. This depends on the agreement between the parties concerned.

 

 

 

 

 

Mian Muhammad Ali
by Mian Muhammad Ali , Assistant Financial Controller , RDAIM GROUP CORPORATE GOVERNANCE

In this scenario, percentage of completion method to be used to recognize revenue and respective cost as well.

Deleted user
by Deleted user

Percentage  of completion method

Noura Zein
by Noura Zein , Finance Manager , Hoover Ferguson

revenue for ongoing project/ incomplete project in a construction company should be calculated as per percentage of complition

mohamed shehata
by mohamed shehata , Head of Project Management Office “PMO” , AXIS-Solutions

As a percentage of completion measured at the last achieved/accepted milestone against the project overall duration, or as a percentage of completion at specified date against the overall project expected closing date.

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