IAS 11 - Construction Contracts
Financial Dictionary — IFRS & IAS Standards
Definition
IAS 11, now largely replaced by IFRS 15, dealt with revenue and cost recognition for long term construction contracts, often using the percentage of completion method.
Detailed Explanation
IAS 11 (superseded mainly by IFRS 15) addressed revenue and cost recognition for construction contracts over time, commonly applying percentage-of-completion based on reliable outcome measurement.
Common Uses
- Used when applying IFRS/IAS requirements for recognition, measurement, presentation, or disclosure.
- Used to justify accounting treatments in working papers and financial statement notes.
- Used to justify accounting treatments in working papers and financial statement notes.
Practical Example
- Example: When preparing year-end reporting, management applies **IAS 11 - Construction Contracts** to determine the correct IFRS treatment and disclosures.
Why This Term Matters
- Why it matters: Ensures compliance with IFRS, improves comparability across periods and entities, and reduces financial reporting risk.