[goforCPA]

Hi all,

Can you please help me with the below. Please let me know if the statements below are accurate and if (4) below can be used under IFRS.

(1) % of Completion – GAAP (Preferred) & IFRS (Required)

(2) Completed Contract – GAAP Only (when reasonable estimate in (1) above cannot be made)

(3) Cost recovery – IFRS (when reasonable estimate in (1) above cannot be made) GAAP (alternative to Installment Sales)

(4) Installement Sales – GAAP (no reasonable estimate can be made), IFRS??? (can this be used under IFRS?)

Thank yo uso much!!!

October 2011-May 2013. Did not loose any credit!!
AUD - 73, 79
REG - 86
FAR - 72, 83
BEC - 80, last one, DONE!!

[mjp44]

I dont think IFRS mentions anything about installment sales. It sounds like a gray area.

FAR- PASSED (11/13)
REG- PASSED (2/14)
BEC- PASSED (5/14)
AUD- PASSED (8/14)

If it's important to you, you will find a way. If it isn't, you will find an excuse.

[GetYourCPA]

Here is the summary of the 4 methods.

Note that percentage of completion and completed contract are for long term contracts and are based on ability to estimate costs.

Under US GAAP, the installment method and cost recovery method come into play due to issues around collectibility of the payment from the customer.

Under IFRS, the cost recovery method is used in place of the completed contract when cost estimates cannot be made.

Percentage of Completion

Required under US GAAP presuming you can estimate costs on the contract

Required for IFRS presuming you can estimate costs on the contract

Completed Contract

Required under US GAAP if you cannot estimate costs on the contract

Not allowed for IFRS

Installment Method

Required under US GAAP if collection of the sales price is not reasonably assured

Not allowed under IFRS

Cost Recovery Method

Required under US GAAP if collection of the sales price is so uncertain that even the installment method is not allowed

Required under IFRS if cost estimates on long term contracts cannot be made such that the percentage of completion method is not allowed

[goforCPA]

GetYourCpa

Thank you so much this was very helpful!!

October 2011-May 2013. Did not loose any credit!!
AUD - 73, 79
REG - 86
FAR - 72, 83
BEC - 80, last one, DONE!!

[Author]

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