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Module I· Revenue Recognition (IFRS 15)Intermediate
Question

How does the percentage-of-completion method work?

Answer

PoC recognizes revenue by project progress, usually costs incurred divided by total estimated costs. It is valid only if IFRS 15 over-time criteria are met.

Deep diveShow more details

The key audit risk is management bias in estimated total cost. Small changes in cost-to-complete can materially move revenue, EBITDA, and backlog conversion.

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