Islamic Finance

International Research Journal of Finance and Economics ISSN 1450-2887 Issue 28 (2009) © EuroJournals Publishing, Inc. 2009 http://www.eurojournals.com/finance.htm

Financial Management of Construction Contracts (Constructability and its Relation with TQM, Cost Shifting Risk and Cost/Benefit)
Tauqir Haider Tauqir Haider is a qualified Professional Accountant, Visiting Faculty member in leading Universities of Pakistan for Finance subjects and having a wide experience on construction contracts (Various World Bank Projects), Consultant & Visiting faculty Member (ACMA-PAK & CMA-USA) E-mail: [e-mail],[e-mail] Tel: [phone]; Fax: [phone] Abstract Financial Management, Book Keeping and Recognition of Construction contracts is now considered as a unique professional job due to its recognition by IASB (International Accounting Standard Board) through IAS (International Accounting Standard) 11. IAS 11 specifically deals with Construction Contracts. This very standard has provided the basis for Constructability. Constructability has received considerable attention from researchers and practicing engineers and other professionals. This is a fact that Constructability has been associated with Total Quality Management (TQM) and Value Engineering. This paper attempts to conceptually describe Cost shifting Risk, Cost/Benefit analysis as well as the evolution of constructability in relation to IAS 11.In addition, the paper presents a framework to measure recognition of Cost and revenues related to Construction Contracts.By providing professionals with this framework, the parameters will be visible and defined, thus removing skepticism as to the financial management as well as enable more consistent and uniform results to be obtained. Additionally, this paper will provide Framework for the Preparation and Presentation of Financial Statements to determine when contract revenue and expenses in the income statement.

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