CONCEPTUAL AND ACCOUNTING ASPECTS RELATING CONSTRUCTION CONTRACTS IN PUBLIC ENTITIES

Subsequent to the nature of activities performed in construction contracts, the date on which contract execution begins and the date of its completion generate two major issues in accountancy. The former issue occurs as a result of the fact that most construction contracts concluded by public sector entities do not specify the value of revenues under the contracts and accountancy therefore must find solutions for the way to allocate contract costs for the reporting periods of time when work was rendered and related expenses were recognized. The latter issue occurs when construction contracts were concluded on a commercial or non-commercial basis while recuperating partial or total costs, an issue which accounting has to settle in relation with the allocation of contract revenues and contract costs of reporting periods during which work was performed.