IFRS Notes

Rendering of services

IAS 18-pr20
For providing services transactions,
revenue recognition method depends on (1)

(1) the outcome of a transaction

If (1) can be reliably estimated,
use percentage of completion method

Under percentage of completion method,
revenue is recognised
by reference to the stage of completion

(1) can be reliably estimated,
when all of the following conditions are met
(1a) inflow of economic benefits is probable
(1b) revenue amount can be reliably measured
(1c) costs incurred and costs to complete the transaction are reliably measured
(1d) stage of completion can be reliably measured


IAS 18-pr26
If (1) cannot be reliably estimated,
revenue is recognised up to (2)

(2) the amount of costs, expected to be recoverable

Since revenue = costs,
no profit is recognised