IFRIC issues clarification on agreements for the construction of real estate

03 July 2008

The Interpretation provides guidance on how to determine whether an agreement for the construction of real estate is within the scope of IAS 11 or IAS 18.

The Interpretation will standardise accounting practice across jurisdictions for the recognition of revenue among real estate developers for sales of units, such as apartments or houses, ‘off plan’, ie before construction is complete.

 

The Interpretation provides guidance on how to determine whether an agreement for the construction of real estate is within the scope of IAS 11 Construction Contracts or IAS 18 Revenue and when revenue from the construction should be recognised.

 

Press release

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