Specialization
Target audience
- Bankers / Account managers
- Financial controllers
- Financial directors
- Tax specialists
- Members of the financial communications department
- Users of financial statements
2 day
New training
Prerequisites
A basic understanding of accounting is required
Objectives
◗ Understand the fundamental principles of IFRS 15 and their specific application to long-term contracts.
◗ Apply the percentage-of-completion method of revenue recognition.
◗ Handle special cases (variable clauses, contract amendments, losses upon termination, etc.).
◗ Include appropriate information in the appendix.
◗ Anticipate the impacts on performance metrics and financial reporting.
Training program
◗ The challenge of revenue recognition in the major projects sector
✔ UNDERSTAND | Illustration: Financial Reporting for Corporate Groups
✔ APPLY | Case study: Measuring the impact on revenue and margin of recognizing revenue based on percentage of completion (over time) or upon completion (point in time)
◗ IFRS 15's 5-step model for long-term projects
– Review of each of the 5 steps of the standard, illustrated with concrete examples
– Decision tree for determining revenue recognition
✔ APPLY | Brainstorming: Is ESMA’s decision regarding revenue recognition for progress on a shipyard project well-founded?
✔ APPLY | Case Study: Assessing the Impact on Revenue and Margin of Combining (or Not Combining) Contracts
◗ Percentage-of-Completion Accounting (Over-Time)
– Percentage-of-Completion Method
– Contract costs, contract acquisition costs, indirect costs, uncertainties and risks (contingencies), handling inefficiencies
✔ APPLY | Case Study: Accounting for a contract using the simple percentage-of-completion method; calculating the percentage of completion, revenue, and margin at each stage
✔ UNDERSTAND | Brainstorming: How to account for expenses that can be allocated to multiple contracts?
✔ APPLY | Practical exercise: Measure and account for the impact of a change in contract cost estimates: whether or not to include an expense in contract costs—whether or not to include inefficiency costs in contract costs
✔ APPLY | Case Study: Accounting for Uncertainties and Risks (Contingencies)
✔ APPLY | Case Study: Recognizing a Warranty Provision in a Long-Term Contract
◗ Special cases
– Contract modifications: the various modifications and their impact on the current contract
– Loss-making contracts: handling losses upon termination
– Price calculation (special cases): financing component, performance conditions, penalties, variable prices, etc.
✔ UNDERSTAND | Illustration: decision tree for various contract modifications
✔ APPLY | Case Study: Measuring the impact of a contract amendment on revenue and margin for an ongoing contract, determining the accounting treatment
✔ APPLY | Case Study: Recognizing a loss on termination over time
✔ UNDERSTAND | Illustration: Application of the limit in the case of a performance penalty
◗ Long-term Group contracts
– Multi-entity contracts and profit sharing, consolidation adjustments
– Disclosures in the notes to the financial statements
✔ APPLY | Case study: Determining consolidation adjustments for a multi-entity contract within a group
✔ UNDERSTAND | Illustration: Recent notes to the financial statements of groups in the project sector
Why choose this course?
Long-term contracts represent a key accounting challenge for project-based industries (construction, engineering, IT, defense, etc.). They involve significant accounting complexities related to the duration of the project, uncertainty regarding costs and revenues, and the variety of performance obligations. Over the course of two days, this highly practical training course enables participants to anticipate the concrete impacts on revenue, margins, and key performance indicators of all events that occur during a complex project.
Teaching and assessment methods
Before the training: Submit your expectations via your online portal 15 days before the training begins and complete a self-assessment of your skills.
Teaching Methods: A variety of methods to cater to different learning styles, encourage active participation, and reinforce learning through experimentation and practice.
Educational materials: presentation materials, reference materials (summary sheets, tables, etc.), and other resources available in your account.
During the training: a mix of theoretical concepts and examples drawn from real-life cases. Participants are given the opportunity to engage in role-playing exercises. Numerous practical exercises allow participants to demonstrate their mastery of the skills as the training progresses.
Monitoring and evaluation: attendance sheet and certificate of completion. Immediate and post-training evaluations conducted using the LearnEval platform.
Price
2,250 EXCL. TAX
Testimonials
Jonathan C.
Company
Training