• Service: Audit, Financial Statement Audit, Financial Reporting & Accounting Standards, Accounting Advisory Services, International Financial Reporting Standards (IFRS)
  • Industry: Real Estate & Construction
  • Type: Regulatory update
  • Date: 30/11/2011

New on the Horizon

These publications consider the requirements of IASB Exposure Drafts and discuss key elements of the proposed requirements and observations.

New on the Horizon: Revenue recognition for building and construction 

The International Accounting Standards Board (IASB) has issued a revised Exposure Draft on Revenue from Contracts with Customers (the ED). This replaces the ED on the same subject which they issued some 18 months ago.
Revenue recognition for building and construction cover
Download Now
PDF files require Adobe Reader to view

There were significant concerns expressed by the Building & Construction sector on the previous ED about the way long term contract accounting would work. In particular, there was concern that they would be obliged to separate contracts into multiple performance obligations and account for them separately. 


There were also widespread concerns that revenue on contracts might not be capable of recognition until the contract was complete, leaving to a lumpy revenue and profit profile.


Our paper discusses:

  • How the changed proposals have improved the position for the B&C sector compared with the ED issued last year
  • Key elements from the 5-step revenue recognition model
  • How to achieve recognition of income and profit as a contract proceeds
  • Critical judgements to be made at contract inception and throughout a contract life cycle
  • New significant disclosure requirements.


Related papers


International Financial Reporting Standards

KPMG helps organisations adopt IFRS, providing practical support to smooth the transition.

Real Estate & Construction

KPMG’s Real Estate & Construction practice offers audit, tax and advisory services for a diverse client base in the property and construction sectors.
  • Subscribe to related feeds