For long-term construction contracts, the cost recovery method under IFRS requires recognizing equal amounts of revenue and cost until all costs are recovered.

Question

Quizplus · Accepted Answer

According to IFRS, for long-term construction contracts, the cost recovery method requires recognizing revenue and cost according to the percentage of completion method (based on the proportion of costs incurred to total expected costs). This may result in recognizing different amounts of revenue and cost over the course of the contract rather than equal amounts until all costs are recovered.

For Long-Term Construction Contracts, the Cost Recovery Method Under IFRS