When using the IFRS zero-gross profit approach, revenue is recognized ________.
A) each year of the contract
B) only the first year of the contract
C) only the last year of the contract
D) only when there is a loss on the contract

Question

Quizplus · Accepted Answer

Under the IFRS zero-gross profit approach, revenue is recognized each year of the contract, but no gross profit is recognized until the contract is completed. This approach is used when the outcome of a contract cannot be reliably estimated.

When Using the IFRS Zero-Gross Profit Approach, Revenue Is Recognized