Recognising Revenue from the Construction of Real Estate in Financial Statements of Developers in Poland

The core business of real estate developers is performance long term developer contracts (directly or by subcontractors), that include constructing and selling residential and non-residential real estates. The characteristic feature of such contracts is the construction of properties that are generally financed by the principal over the whole project, by way of contractually agreed advances, and then – after the investment process has been completed – the ownership right is transferred to the buyer.Due to no unequivocal regulations in scope of revenue recognition resulting from property development contracts until 31 December 2008 some developers recognised revenues on developer contracts in accordance with IAS 18 “Revenue" some used the method of revenues and expenses percentage-of-completion in accordance with IAS 11 “Construction Contracts”.The immediate aim of this paper is to analyze accounting policies in scope of revenue recognition resulting from property development contracts performing by developers listed on the Warsaw Stock Exchange and to analyze how it have changed in accordance with IFRIC 15 „Agreements for the Construction of Real Estate”, that refers to the moment of recognition of revenues in reference to the sale of real estate