18 September 2009
MASB held a special meeting with the local property developers to discuss IC Interpretation 15 Agreements for the Construction of Real Estate.
As a background, the Interpretation standardises the accounting practice for revenue recognition among real estate. It provides guidance on whether revenue from the construction of real estate should be recognised by reference to the stage of completion or on the completed contract method.
According to the Interpretation, an entity shall recognise revenue by reference to the stage of completion method, if the agreement meets the criteria of a construction contract, or significant risk and rewards of ownership of the real estate is transferred to the buyer continuously as construction progresses.
The meeting’s objectives were to update the constituents on the changes of the current practices and to understand their readiness on implementing the Interpretation.
The meeting was chaired by En Mohammad Faiz (MASB Chairman) and presented by Ms Tan Bee Leng (MASB Technical Director).
Representatives from the Financial Reporting Standards Implementation Committee were also present given their mandate on implementation guidance.