Recognising revenue for real estate construction contracts : an interpretation of IFRS 15

Abstract: The International Accounting Standards Board replaced IFRIC 15, which had been specifically established to resolve uncertainties in revenue recognition for real estate entities, by IFRS 15 which is not industry specific. This raised a question whether IFRS 15 does resolve revenue recognition issues that were affected by IFRIC 15 for real estate construction companies. This study aims to determine if IFRS 15 provides adequate guidance in determining when revenue from real estate construction companies shall be recognised by following a three-step structured approach. The structured approach was based on the sub-objectives of this study. The first subobjective was to determine, with the guidance of the former accounting standard IFRIC 15, when revenue for real estate contracts was recognised. This was followed by a discussion on the revenue recognition principles provided by the new revenue standard, IFRS 15. The last sub-objective, which compared the new revenue standard to the old standard, concluded on whether IFRS 15 provides adequate guidance for real estate contracts...M.Com. (International Accounting