Construction Contracts (IFRS 15)

IFRS 15 outlines how companies recognize revenue from contracts involving construction projects. It emphasizes the importance of identifying distinct performance obligations, such as specific deliverables within a contract. Revenue is recognized over time or at a point in time, depending on how control transfers to the client. This approach requires companies to estimate project costs, monitor progress, and adjust for any changes. The aim is to provide clearer financial reporting, ensuring stakeholders understand how and when a company earns money from its construction activities.