By the end of this presentation, you will know… • Background • Purpose • Issues
Potential issues found in preliminary survey • Notion of ‘control’ • Long-term contracts • Elimination of risks-and-rewards
Why we focus on discussion? • DP’s comment due is already passed • ED will be couple of months ahead • We need to share our common concerns
We will focus on… ‘Control’ and Potential issues in applying the model to long-term contracts
Overview of today’s paper: • 4 discussion questions • Questions 1 – 3 relate to ‘control’ • Question 4 relates to risks and rewards • We will focus on the former set of questions
Some WG members propose to determine the transfer of control to a customer when the reporting entity: • has performed work in creating or acquiring the promised good; and • unconditionally entitled to compensation from the customer for the work performed.
QUESTION 1 What is the essential nature of ‘control’? What are your concerns regarding the notion of the ‘transfer of control’ proposed in the DP?
QUESTION 2 Do you think the indicators proposed in the IASB’s staff paper (September, 2009) are appropriate? How can we improve the proposed set of indicators?
QUESTION 3 In order to provide decision-useful performance information, what is the best way to report revenue for construction contracts or other long-term contracts?