New revenue recognition standard – Impact to real estate property developers
In July 2014, the Hong Kong Institute of Certified Public Accountants (“HKICPA”) issued HKFRS 15, Revenue from Contracts with Customers, which is identical to IFRS 15 issued by International Accounting Standards Board (“IASB”). Entities which prepare financial statements in accordance with HKFRS/IFRS need to apply HKFRS/IFRS 15 for financial periods beginning on or after 1 January 2017 (early application permitted).
The standard may result in a significant change on how revenue and costs are recognised for real estate property developers. We have highlighted in this publication a number of key areas and practical examples which are intended to assist entities with a preliminary understanding of the implications of this new standard.
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