IFRS 15 - Construction of boat
Posted: 19 May 2022, 21:12
I have a question in relation to revenue from contracts with customers.
A company A concluded a contact with a customer for the construction of a leisure boat. The construction process will take two years.
As per the contract, the customer is obliged to pay to company A the agreed construction price in installments at specified periods of time. The company A is not a shipyard. The shipyards works will be subcontracted to a shipyard of a third party and invoices for the works will be issued to the company A by the shipyard.
Except of the shipyard, the company A will receive invoices from other parties who will engage in the construction process (e.g. purchase of raw materials, carpetry works, etc).
My question is whether the company A is entitled by IFRS 15 to recognize revenue at the end of the first year of construction based on the percentage of the costs occured within this year, over the total cost of construction (input method)
Thank you in advance!
A company A concluded a contact with a customer for the construction of a leisure boat. The construction process will take two years.
As per the contract, the customer is obliged to pay to company A the agreed construction price in installments at specified periods of time. The company A is not a shipyard. The shipyards works will be subcontracted to a shipyard of a third party and invoices for the works will be issued to the company A by the shipyard.
Except of the shipyard, the company A will receive invoices from other parties who will engage in the construction process (e.g. purchase of raw materials, carpetry works, etc).
My question is whether the company A is entitled by IFRS 15 to recognize revenue at the end of the first year of construction based on the percentage of the costs occured within this year, over the total cost of construction (input method)
Thank you in advance!