IFRS 15 cho ngành xây dựng

#1 · 17 April 2025, 16:53

Quote from bsdinsight on 17 April 2025, 16:53

IFRS 15: Impacts on the Construction Industry

Introduction

The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) issued IFRS 15 Revenue from Contracts with Customers, effective from January 1, 2017. This standard consolidates revenue recognition principles across industries, replacing specific guidance like IAS 11 Construction Contracts. The construction industry faces significant changes, as IFRS 15 introduces new concepts for revenue and cost recognition, moving away from the automatic stage-of-completion method. This document outlines key impacts on construction contracts, focusing on critical judgments at contract inception, during the contract lifecycle, and disclosure requirements.

Critical Judgments at Contract Inception

Pre-Contract Costs

Under IFRS 15, only incremental costs of obtaining a contract (e.g., sales commissions) are capitalized if recoverable. Costs incurred regardless of winning the contract (e.g., due diligence) are expensed unless directly chargeable to the customer. Fulfillment costs (e.g., design costs) can be capitalized if they relate directly to the contract, enhance resources for satisfying performance obligations, and are expected to be recovered.

Comparison with IAS 11:

IAS 11: Allows capitalization of a broader range of costs (e.g., due diligence, internal tender costs) after preferred bidder status, if recoverable.

IFRS 15: Limits capitalization to incremental costs and specific fulfillment costs, potentially increasing expenses for non-incremental costs.

Impact: Stricter criteria may lead to earlier expensing of bid-related costs.

Contract Performance Obligations

IFRS 15 requires identifying performance obligations—promises to transfer distinct goods or services—as the unit of account. A good or service is distinct if the customer can benefit from it independently and it is separately identifiable from other contract promises. In construction, where activities are highly integrated, contracts typically constitute a single performance obligation due to significant integration services.

Comparison with IAS 11:

IAS 11: Treats closely interrelated construction contracts as a single unit of account unless specific exceptions apply.

IFRS 15: Requires entities to demonstrate integration and interrelation to account for the contract as one performance obligation.

Impact: Entities must document judgments to avoid splitting contracts into multiple obligations, which could complicate revenue recognition.

Revenue Recognition: Over Time or at a Point in Time

IFRS 15 allows revenue recognition over time if one of three criteria is met:

The customer simultaneously receives and consumes benefits (e.g., routine services).

The entity’s performance creates or enhances a customer-controlled asset (e.g., building on a customer’s site).

The entity’s performance creates an asset with no alternative use, and the entity has an enforceable right to payment for performance to date (e.g., specialized assets).

If these criteria are not met, revenue is recognized at a point in time when control transfers, often at practical completion.

Comparison with IAS 11:

IAS 11: Mandates revenue recognition over time using the stage-of-completion method for all construction contracts.

IFRS 15: Requires meeting specific criteria for progressive recognition, with no automatic right.

Impact: Most construction contracts will likely qualify for over-time recognition, but entities must evaluate contracts against new criteria, potentially deferring revenue if criteria are unmet.

Critical Judgments During the Contract Lifecycle

Contract Costs

Fulfillment costs (e.g., work in progress) are capitalized under IFRS 15 if they relate to future performance obligations, enhance resources, and are recoverable. Costs like general administration, wasted materials, or those related to satisfied obligations are expensed.

Comparison with IAS 11:

IAS 11: Prohibits capitalization of costs not attributable to contract activity (e.g., general administration, selling costs).

IFRS 15: Provides specific guidance to capitalize only costs tied to future obligations.

Impact: Similar to IAS 11, but contractors must align cost capitalization with IFRS 15’s stricter criteria.

Contract Progress

For performance obligations satisfied over time, progress is measured using input (e.g., cost-to-cost) or output (e.g., surveys of work) methods, chosen to depict performance accurately. Input methods exclude costs not reflecting performance (e.g., wasted materials).

Comparison with IAS 11:

IAS 11: Allows stage-of-completion methods like cost-to-cost or physical completion.

IFRS 15: Requires a consistent method depicting performance, potentially requiring method changes.

Impact: Contractors may need to adjust measurement methods, affecting revenue timing.

Variable Consideration

Variable consideration (e.g., bonuses, penalties) is estimated using the expected value or most likely amount, included in revenue only if it is highly probable that no significant reversal will occur. Estimates are reassessed each period.

Comparison with IAS 11:

IAS 11: Recognizes revenue when probable and reliably measurable.

IFRS 15: Uses a higher “highly probable” threshold, potentially delaying recognition.

Impact: Stricter criteria may defer variable revenue recognition.

Contract Modifications

Contract modifications (e.g., variations, claims) are accounted for as separate contracts only if they add distinct goods or services. Otherwise, they adjust the existing contract’s price and progress. Unpriced modifications follow variable consideration guidance.

Comparison with IAS 11:

IAS 11: Requires probable approval for variations and advanced negotiation for claims.

IFRS 15: Requires approved modifications and applies variable consideration rules for claims.

Impact: Higher approval threshold may delay revenue recognition for modifications.

Loss-Making Contracts

IFRS 15 refers to IAS 37 for loss-making (onerous) contracts, where provisions are recognized when unavoidable costs exceed benefits. Only unavoidable costs (e.g., subcontractor costs, not full-time staff salaries) are considered.

Comparison with IAS 11:

IAS 11: Recognizes total contract losses immediately.

IFRS 15/IAS 37: Considers only unavoidable costs, potentially reducing loss provisions.

Impact: Different cost considerations may alter loss recognition timing and amount.

Disclosure Requirements

IFRS 15 introduces extensive disclosure requirements to clarify revenue, timing, and uncertainties:

Disaggregation of Revenue: By geography, market, or contract type.

Contract Balances: Reconciliations of contract assets and liabilities, including revenue from prior periods.

Performance Obligations: Details on satisfaction timing, payment terms, and warranties.

Future Revenue: Transaction price allocated to remaining obligations for contracts exceeding one year.

Judgments: Methods for revenue recognition, transaction price allocation, and cost amortization.

Impact: These requirements significantly increase disclosure efforts, requiring early preparation.

Next Steps

While IFRS 15 retains progressive revenue recognition, stricter criteria for over-time recognition, variable consideration, and modifications may defer revenue. Enhanced disclosures demand robust data collection. Contractors should assess contracts and processes to ensure compliance by January 1, 2017.

IFRS 15: Impacts on the Construction Industry

Introduction

The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) issued IFRS 15 Revenue from Contracts with Customers, effective from January 1, 2017. This standard consolidates revenue recognition principles across industries, replacing specific guidance like IAS 11 Construction Contracts. The construction industry faces significant changes, as IFRS 15 introduces new concepts for revenue and cost recognition, moving away from the automatic stage-of-completion method. This document outlines key impacts on construction contracts, focusing on critical judgments at contract inception, during the contract lifecycle, and disclosure requirements.

Critical Judgments at Contract Inception

Pre-Contract Costs

Under IFRS 15, only incremental costs of obtaining a contract (e.g., sales commissions) are capitalized if recoverable. Costs incurred regardless of winning the contract (e.g., due diligence) are expensed unless directly chargeable to the customer. Fulfillment costs (e.g., design costs) can be capitalized if they relate directly to the contract, enhance resources for satisfying performance obligations, and are expected to be recovered.

Comparison with IAS 11:

IAS 11: Allows capitalization of a broader range of costs (e.g., due diligence, internal tender costs) after preferred bidder status, if recoverable.
IFRS 15: Limits capitalization to incremental costs and specific fulfillment costs, potentially increasing expenses for non-incremental costs.
Impact: Stricter criteria may lead to earlier expensing of bid-related costs.

Contract Performance Obligations

IFRS 15 requires identifying performance obligations—promises to transfer distinct goods or services—as the unit of account. A good or service is distinct if the customer can benefit from it independently and it is separately identifiable from other contract promises. In construction, where activities are highly integrated, contracts typically constitute a single performance obligation due to significant integration services.

Comparison with IAS 11:

IAS 11: Treats closely interrelated construction contracts as a single unit of account unless specific exceptions apply.
IFRS 15: Requires entities to demonstrate integration and interrelation to account for the contract as one performance obligation.
Impact: Entities must document judgments to avoid splitting contracts into multiple obligations, which could complicate revenue recognition.

Revenue Recognition: Over Time or at a Point in Time

IFRS 15 allows revenue recognition over time if one of three criteria is met:

The customer simultaneously receives and consumes benefits (e.g., routine services).
The entity’s performance creates or enhances a customer-controlled asset (e.g., building on a customer’s site).
The entity’s performance creates an asset with no alternative use, and the entity has an enforceable right to payment for performance to date (e.g., specialized assets).

If these criteria are not met, revenue is recognized at a point in time when control transfers, often at practical completion.

Comparison with IAS 11:

IAS 11: Mandates revenue recognition over time using the stage-of-completion method for all construction contracts.
IFRS 15: Requires meeting specific criteria for progressive recognition, with no automatic right.
Impact: Most construction contracts will likely qualify for over-time recognition, but entities must evaluate contracts against new criteria, potentially deferring revenue if criteria are unmet.

Critical Judgments During the Contract Lifecycle

Contract Costs

Fulfillment costs (e.g., work in progress) are capitalized under IFRS 15 if they relate to future performance obligations, enhance resources, and are recoverable. Costs like general administration, wasted materials, or those related to satisfied obligations are expensed.

Comparison with IAS 11:

IAS 11: Prohibits capitalization of costs not attributable to contract activity (e.g., general administration, selling costs).
IFRS 15: Provides specific guidance to capitalize only costs tied to future obligations.
Impact: Similar to IAS 11, but contractors must align cost capitalization with IFRS 15’s stricter criteria.

Contract Progress

For performance obligations satisfied over time, progress is measured using input (e.g., cost-to-cost) or output (e.g., surveys of work) methods, chosen to depict performance accurately. Input methods exclude costs not reflecting performance (e.g., wasted materials).

Comparison with IAS 11:

IAS 11: Allows stage-of-completion methods like cost-to-cost or physical completion.
IFRS 15: Requires a consistent method depicting performance, potentially requiring method changes.
Impact: Contractors may need to adjust measurement methods, affecting revenue timing.

Variable Consideration

Variable consideration (e.g., bonuses, penalties) is estimated using the expected value or most likely amount, included in revenue only if it is highly probable that no significant reversal will occur. Estimates are reassessed each period.

Comparison with IAS 11:

IAS 11: Recognizes revenue when probable and reliably measurable.
IFRS 15: Uses a higher “highly probable” threshold, potentially delaying recognition.
Impact: Stricter criteria may defer variable revenue recognition.

Contract Modifications

Contract modifications (e.g., variations, claims) are accounted for as separate contracts only if they add distinct goods or services. Otherwise, they adjust the existing contract’s price and progress. Unpriced modifications follow variable consideration guidance.

Comparison with IAS 11:

IAS 11: Requires probable approval for variations and advanced negotiation for claims.
IFRS 15: Requires approved modifications and applies variable consideration rules for claims.
Impact: Higher approval threshold may delay revenue recognition for modifications.

Loss-Making Contracts

IFRS 15 refers to IAS 37 for loss-making (onerous) contracts, where provisions are recognized when unavoidable costs exceed benefits. Only unavoidable costs (e.g., subcontractor costs, not full-time staff salaries) are considered.

Comparison with IAS 11:

IAS 11: Recognizes total contract losses immediately.
IFRS 15/IAS 37: Considers only unavoidable costs, potentially reducing loss provisions.
Impact: Different cost considerations may alter loss recognition timing and amount.

Disclosure Requirements

IFRS 15 introduces extensive disclosure requirements to clarify revenue, timing, and uncertainties:

Disaggregation of Revenue: By geography, market, or contract type.
Contract Balances: Reconciliations of contract assets and liabilities, including revenue from prior periods.
Performance Obligations: Details on satisfaction timing, payment terms, and warranties.
Future Revenue: Transaction price allocated to remaining obligations for contracts exceeding one year.
Judgments: Methods for revenue recognition, transaction price allocation, and cost amortization.

Impact: These requirements significantly increase disclosure efforts, requiring early preparation.

Next Steps

While IFRS 15 retains progressive revenue recognition, stricter criteria for over-time recognition, variable consideration, and modifications may defer revenue. Enhanced disclosures demand robust data collection. Contractors should assess contracts and processes to ensure compliance by January 1, 2017.

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