Application Of Percentage Of Completion Method Under New Income Criteria

The real estate industry has been in a controversial state since its development.It has always been a controversial issue to think that real estate is a profitable industry and the real profit margin of real estate is very low.In order to further promote the normative development of the real estate industry,IASB and FASB jointly promulgated the new revenue standard of International Financial Reporting Standard No.15-Customer Contract Income in 2014.According to the current standards,income recognition of real estate enterprises in China belongs to the accounting scope of Accounting Standards for Enterprises No.14-Income,and the completion confirmation method(that is,at a time point)is applied to confirm income.There is a high consistency between the draft of CAS14 and IFRS15 issued in December 2015.Combining whether the transfer of control right can be realized in a certain period of time,three criteria can be put forward based on the application of completion percentage method.This paper focuses on the relationship between the completion percentage method and the adaptability of the real estate industry in the context of new construction standards.In the course of the research,the paper first expounds the relevant contents of income criteria and real estate development industry income recognition,and then compares and analyzes the existing standards and the problems such as advantages,disadvantages,and differences that existed before CAS14.A systematic analysis and research on the completion percentage method are also carried out.Based on the above,this article analyzes and expounds the specific situation and business process of the real estate industry at present,and systematically analyzes the key terms of the contract under the case of the high-end residential customization project of the real estate company.Further clarification of the revenue recognition method applied to the business;Secondly,based on the application of the completion percentage method and the completion confirmation method,the impact on the quality of financial analysis and accounting information in the application of the two methods is analyzed.Finally,the above content accommodation percentage method is applied to the current stage of the new standards in the real estate industry related business obstacles and solutions.The conclusion of the study is as follows:Some of the business of real estate enterprises under the new standards,although the application of the completion percentage method can achieve the improvement of the scientific and effective accounting information decision-making,but also put forward higher requirements for all aspects.Therefore,this paper suggests that the quality of accounting information under the application of the new standard should be improved by issuing operational guidelines,strengthening the role of supervision by firms and witnesses,and improving the professional and professional ethics of financial personnel.