Accounting policies of companies listed on Warsaw stock exchange regarding recognition of revenue from property development contracts
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The core business of property developers is performance of long term develop-ment contracts involving construction (directly or by subcontractors) and selling of residential and non-residential real estate. The characteristic feature of such con-tracts is that construction of property is generally financed by the principal during the entire project, by way of contractually agreed advances, and then – after the investment process has been completed – the ownership right is transferred to the buyer.Due to absence of clear regulations on recognition of revenue arising from prop-erty development contracts until 31 December 2008 some developers recognised revenue from such contracts in accordance with IAS 18 „Revenue”, while others used the percentage-of-completion method in accordance with IAS 11 „Construction Contracts”.The aim of this paper is to analyze accounting policies used for recognition of revenue resulting from property development contracts by developers listed on the Warsaw Stock Exchange and to analyze how they have changed in consequence of IFRIC 15 „Agreements for the Construction of Real Estate”.
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