Revenue recognition for construction contracts: TAS relaxes AS 7's reliable estimate conditions and alters early stage and loss rules.
TAS departs from AS 7 by omitting AS 7's reliable estimate precondition for construction contract revenue recognition, not requiring immediate recognition of expected contract losses, permitting revenue recognition to the extent of costs incurred only until completion exceeds twenty five percent, and imposing fewer disclosure obligations for construction contracts. TAS also diverges from AS 12 on government grants by requiring recognition not to be postponed beyond receipt, prescribing reduction of asset carrying amount with depreciation of the net amount, mandating revenue recognition for revenue grants, and imposing more extensive grant disclosure requirements. (AI Summary)