Revenue Recognition Principle Construction Contracts

While there is no fasb statement for this area aicpa accounting research bulletin arb no.

Revenue recognition principle construction contracts. These are contracts dedicated to the construction of an asset or a combination of assets such as large ships office buildings and other projects that usually span multiple years. Subscribe to weekly revenue recognition update gaap has carved out a special niche for construction contractors. 45 long term construction type contracts 1955 and aicpa statement of position sop 81 1 accounting for performance of construction type and certain production type contracts 1981. If entering into contracts that will span through 2019 begin to map out the differences in revenue recognition for budgeting and reporting purposes.

This revenue apocalypse may be no more than a blip on the evolution of gaap from rules based to principles based. 1 the percentage of completion method where revenue costs and profits are recognized each accounting period as the contract progresses to completion using the input or output methods such as cost to cost to measure performance.