The effect that IFRIC Interpretation titled Agreements for the Construction of Real Estate will have the following effect for entities that undertake off-the-plan real estate sales is that:
A) the percentage of completion method of revenue recognition will be discontinued.
B) the use of the completed contracts method of revenue recognition will be discontinued.
C) the amount of revenue recognised on such sales will reduce.
D) the amount of revenue recognised on such sales will increase.

Question

Quizplus · Accepted Answer

The IFRIC Interpretation requires that revenue from real estate sales be recognized only when the entity has transferred control of the property to the buyer, which often means the percentage of completion method is no longer applicable.

The Effect That IFRIC Interpretation Titled Agreements for the Construction