The new revenue standard IFRS 15 – Revenue from Contracts with Customers has deep implications for engineering and construction contracts.
We can help you navigate those waters.
Companies in the engineering and construction industry applying IFRS have primarily been following IAS 11 – Construction Contracts to account for revenue.
However, the new revenue standard IFRS 15 — Revenue from Contracts, applicable on or after 1 January 2018, will wipe off all existing construction contract guidance and revenue recognition guidance under IFRS. To complicate matters further, almost all construction companies are in equipment leasing arrangements, which should be reported under the new framework of IFRS 16 – Leases, applicable on or after 1 January 2019.
Our technical experts can handle this accounting disruption for you, specifically:
- We can provide advice and assist in the implementation process of adapting existing business models, accounting policies, IT systems, internal processes and controls;
- On a transaction level, we can provide an updated revenue recognition pattern for each distinct type of construction contract under the new five-step model replacing the previous percentage-of-completion method;
- We can revise existing lease arrangements to assess the impact on your financial position and performance as a result of the upcoming transition to IFRS 16.
We help the engineering and construction companies with accounting and reporting services such as:
More than 30 jurisdictions across Europe require IFRS standards for listed financial institutions or public interest entities (PIEs). Others are on the path to either full acceptance or – at the very least – dual compliance. We can help you be compliant and confident in your numbers.Learn more
In modern capital markets, accounting and financial reporting are becoming increasingly complex. IFRS issues need to be anticipated in advance and resolved timely in order to preserve the value of the business and avoid regulatory sanctions. Let us help with that.Learn more