AASB 111 'Construction Contracts' requires the use of the percentage of completion method when:

Question

Quizplus · Accepted Answer

AASB 111 requires the use of the percentage of completion method when the outcome of the construction contract can be estimated reliably. This method recognizes revenue and expenses based on the stage of completion of the contract, which requires reliable estimates of contract costs and progress towards completion. The outcome of the contract being relevant or easily recognized under the fair value method are not criteria for using the percentage of completion method, hence options A and B are incorrect.

AASB 111 'Construction Contracts' Requires the Use of the Percentage