Strenghs and Weaknesses of Accounting
INTERNATIONAL ACCOUNTING STANDARD (IAS) 11:
CONSTRUCTION CONTRACTS
a) DEFINITION AND EXPLANATION OF IAS 11
IAS 11 Construction Contracts was issued by the International Accounting Standards Committee in December 1993. It replaced IAS 11 Accounting for Construction Contracts (issued in March 1979). In May 1999 a paragraph was amended by IAS 10: Events after the Balance Sheet Date. In April 2001 the International Accounting Standards Board resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless and until they were amended or withdrawn.
IAS 11 has been amended by the following IFRSs: * IAS 23 Borrowing Costs (as revised in March 2007) * IAS 1 Presentation of Financial Statements (as revised in September 2007)
The following terms are used in this Standard with the meanings specified: * A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use. * A fixed price contract is a construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which in some cases is subject to cost escalation clauses. * A cost plus contract is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a percentage of these costs or a fixed fee. * A construction contract may be negotiated for the construction of a single asset such as a bridge, building, dam, pipeline, road, ship or tunnel. A construction contract may also deal with the construction of a number of assets which are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use; examples of such contracts include those for the construction of refineries and other complex pieces of
CONSTRUCTION CONTRACTS
a) DEFINITION AND EXPLANATION OF IAS 11
IAS 11 Construction Contracts was issued by the International Accounting Standards Committee in December 1993. It replaced IAS 11 Accounting for Construction Contracts (issued in March 1979). In May 1999 a paragraph was amended by IAS 10: Events after the Balance Sheet Date. In April 2001 the International Accounting Standards Board resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless and until they were amended or withdrawn.
IAS 11 has been amended by the following IFRSs: * IAS 23 Borrowing Costs (as revised in March 2007) * IAS 1 Presentation of Financial Statements (as revised in September 2007)
The following terms are used in this Standard with the meanings specified: * A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use. * A fixed price contract is a construction contract in which the contractor agrees to a fixed contract price, or a fixed rate per unit of output, which in some cases is subject to cost escalation clauses. * A cost plus contract is a construction contract in which the contractor is reimbursed for allowable or otherwise defined costs, plus a percentage of these costs or a fixed fee. * A construction contract may be negotiated for the construction of a single asset such as a bridge, building, dam, pipeline, road, ship or tunnel. A construction contract may also deal with the construction of a number of assets which are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use; examples of such contracts include those for the construction of refineries and other complex pieces of