Percentage of Completion Tool
The valuation and recording of construction contracts in accordance with IAS 11 poses great challenges for accounting according to IFRS.
The percentage of completion method according to IAS 11 foresees the revenue recognition corresponding to the percentage of completion of orders in each order processing period for construction contracts. For example, order revenue can be realised using the so-called cost to costs method using the following formula:
To simplify the extensive and time-intensive valuation and data management of construction contracts FAS AG has developed an MS Excel based tool. On the basis of this PoC tool projects can be planned on a scaleable structure of secondary costs which can be set as desired and monitored in the integrated costs accounting. Furthermore, the percentage of completion is automatically determined and any impending losses can be calculated.
The extensive disclosure requirements in IAS 11 are covered in the tool as is the calculation of journal entries for accounting purposes.
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You can request further information about the Percentage of Completion Tool using our contact form.
