The Accounting Standards Council (ASC) has carried out an evaluation
of IFRIC Interpretation 15 (the "interpretation") issued
by the International Accounting Standards Board (IASB) on 3 July
2008.
The interpretation applies to the accounting for revenue and associated
expenses by entities that undertake the construction of real estate
directly or through subcontractors. Agreements in the scope of this
interpretation are agreements for the construction of real estate.
In addition to the construction of real estate, such agreements
may include the delivery of other goods or services.
The interpretation addresses two issues:
- Is the agreement within the scope of International Accounting
Standard (IAS) 11 Construction Contracts or IAS 18 Revenue?;
and
- When should revenue from the construction of real estate be
recognised?
The ASC’s evaluation of the interpretation included issues
such as the impact of the interpretation on Singapore businesses,
especially property developers. In this regard, the ASC had approached
the Real Estate Developers Association of Singapore (REDAS) on its
members’ views and feedback on the interpretation. This included
2 focus group discussions held between the ASC and REDAS’
members.
The ASC had also sought feedback from the Institute of Certified
Public Accountants of Singapore, the accounting sector and other
interested parties, together with active monitoring of international
developments in this area.
Whilst the interpretation is effective for annual periods beginning
on or after 1 January 2009, the ASC is currently in the process
of consulting with various interest groups and have not decided
on the possible adoption of the interpretation as Interpretation
of Financial Reporting Standard (INT FRS) 115 in Singapore. The
adoption of the INT FRS 115 will not be earlier than for annual
periods beginning on or after 1 January 2009. The ASC is also considering
delaying the effective date of the interpretation, should the interpretation
be adopted as INT FRS 115.
The ASC, as the accounting standards setting authority of Singapore,
will continue to conduct regular reviews of financial standards
and will make appropriate changes relevant to local business conditions
while taking cognizance of international developments. |
