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welcome to a short video on accounting for construction contracts the key issue in relation to the accounting for construction contracts is when to recognize the revenues and expenses associated with that contract the reason for this is that often the construction of major projects such as Wembley stadium in the UK or the Sydney Opera House take many years and determining a how much profit is going to be made and B when that should occur is open to interpretation if there was no accounting standard to deal with it without SS b1 11 we could see companies recognizing all revenues and expenses in the last year of the project or in the first year of the project or even throughout the life of the project so how does SS be 111 construction contracts deal with this according to SS P 111 construction contracts how a contract is accounted for is dependent on whether the stage of completion can be reliably measured if it can be paragraph 22 tells us to use that percentage as a way to recognize
