This edition of New on the Horizon focuses on the potential impact the revised exposure draft may have on revenue on many common transactions in the real estate industry, affecting both developers and investors.
- Criteria for identifying separate performance obligations have been revised, introducing a clearer test to determine when the land and building elements of a real estate transaction should be accounted for separately.
- Criteria for recognising revenue over time (similar to current percentage of completion accounting) have been revised with real estate transactions in mind but questions remain regarding the recognition of apartment sales.