IFRS and GAAP will sometimes differ in the method of revenue recognition applied to construction contracts.Three different methods are involved: percentage of completion, cost recovery, and completed contract.The fastest to slowest revenue recognition among the methods is
A)percentage of completion; completed contract; cost recovery
B)completed contract; percentage of completion; cost recovery
C)percentage of completion; cost recovery; completed contract
D)cost recovery; percentage of completion; completed contract

Question

Quizplus · Accepted Answer

The fastest method of revenue recognition is percentage of completion, followed by cost recovery, and then completed contract. Therefore, option C correctly lists the methods in order of fastest to slowest revenue recognition.

IFRS and GAAP Will Sometimes Differ in the Method of Revenue