The adequacy of IFRS 15 for revenue recognition in the construction industry
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | The adequacy of IFRS 15 for revenue recognition in the construction industry | |
| Creator | Van Wyk, Milan Coetsee, Danie | |
| Description | Orientation: IFRS 15 Revenue from Contract with Customers replaced the industry-specific financial reporting standard IAS 11 Construction Contracts, becoming effective on or after 1 January 2018. Construction is regarded as a complex industry with regular changes in contract scope and pricing. Research purpose: The objective of this article was to evaluate the adequacy of the guidance of IFRS 15 to deal with the complexities of the construction industry in order to recognise revenue derived from construction contracts. In evaluating the application of the principles of IFRS 15 to construction contracts, a structured approach was followed based on the five-step approach followed in IFRS 15. Motivation: The lack of industry-specific guidance for construction revenue, together with the complexities of the construction industry, makes the application of IFRS 15 challenging for construction entities. Research design: The revenue recognition principles developed in IFRS 15 were assessed through doctrinal research, a research method focusing on the core doctrines developed in practice. Reform-oriented doctrinal research was used to assess the doctrines developed in IFRS 15 by applying authoritative interpretation. Main findings: The article found that IFRS 15 provides an appropriate framework.Implications and contribution: The implications of IFRS 15 are that construction entities need to understand the rights and obligations in contracts and how these affect the revenue recognition of construction contracts. This article provided insights into the application of IFRS 15 to construction contracts. | |
| Publisher | AOSIS | |
| Date | 2020-02-24 | |
| Identifier | 10.4102/jef.v13i1.474 | |
| Source | Journal of Economic and Financial Sciences; Vol 13, No 1 (2020); 13 pages 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/474/838
https://jefjournal.org.za/index.php/jef/article/view/474/837
https://jefjournal.org.za/index.php/jef/article/view/474/839
https://jefjournal.org.za/index.php/jef/article/view/474/836
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