DMCI restated the financials of its property-development arm as it shifted in accounting policy from
completed contract method to percentage of completion method, which was done to align with current accounting practice in the real-estate industry.
The property developer's financial results in the prior year were restated to reflect the shift in accounting policy from
completed contract method to percentage of completion method, aligning itself with the current accounting practice in the real estate industry.
If no, then as a small contractor, you should use either: accrual, exempt percentage of completion method,
completed contract method, or PCM for all your general construction contracts.
The Commissioner maintained that Shea Homes had improperly reported income using the
completed contract method. (45) The essence of the Commissioner's argument was that the subject matter of the sales contracts was the individual homes themselves, rather than the larger community that included the amenities and common improvements.
Revenue for longterm contracts is recognized before delivery using either the percentage-of-completion or
completed contract method. GAAP requires the percentage-of-completion method unless reliable estimates cannot be made.
We use the
completed contract method if we cannot estimate the costs with a reasonable degree of reliability.
Deyaar said it has adopted a revenue recognition policy based on the recommendations of the International Accounting Standard Board relating to the International Financial Reporting Interpretations Committee (IFRIC) 15 u Agreements for the Construction of Real Estate, to recognise revenue based on the
completed contract method.
The directives, each dated September 15, 2009, relate to the Tier I mixed service costs issue and two Tier II issues: contractual allowances in the health care industry and the super
completed contract method of accounting.
The lower revenue and net operating profit over half-year 2008 figures of AED 8,126 million ($2,212 million) and AED 3,011 million ($820 million), respectively are attributed to the overall economic slowdown following the global economic crisis, and Emaar's new revenue recognition policy based on
completed contract method.
As of January 1, 2009, Emaar has revised its revenue recognition policy based on the new recommendation of the International Accounting Standard Board (IASB) relating to the International Financial Reporting Interpretations Committee (IFRIC) 15 - Agreements for the Construction of Real Estate, to recognize revenue based on
completed contract method.
One alternative is the
completed contract method, under which revenue and expenses are not recorded until the contract is complete.
