IFRS Notes

IAS 11 and U.S. GAAP

If the contract outcome cannot be estimated reliably,

IAS 11
ias 11-pr32
recognise revenue up to the costs recoverable

U.S. GAAP
ARB 45-pr15
asc 605-35-25-90
completed contract method is preferable

asc 605-35-25-67
If there is an assurance of no contract loss,
(1) is recommended over (2)

(1) percentage of completion method on a zero profit margin
(2) completed contract method

Income statement recognition
asc 605-35-25-68

(1) percentage of completion method on a zero profit margin
revenue and costs are recognized with same amounts

since revenue = costs, zero profit margin

(2) completed contract method
no revenue and costs are recognized until the contract is completed