Construction Contracts Accounting ACNE 4226E

Course description:

The construction industry is one of the most unique when it comes to being in compliance with the various accounting and auditing standards. This course examines the most recent updates and key issues impacting construction accounting.
What is meant by construction cost, all cost related to construction process, right from materials, labor costs, consultancy and all management expenses. Construction accounting involves charging construction costs to the applicable contract.
Also revenue recognition rules for contracts in progress.In most cases, revenue is recognized using the Percentage of Completion Method. Under this method, revenue is recognized using an estimate for the overall anticipated profit for a particular contract multiplied by the estimated percent complete of that contract,this involves the inherent risk of relying upon estimates.

Course Aims:

  • Learning the terminology for construction contract accounting
  • The Construction contract Life Cycle.
  • Elements of Financial Statements of construction companies.
  • Job Cost Reporting, how to allocate costs, how to structure reports.
  • Revenue Recognition – Contract value, percent complete, what drives the WIP, the effect of change orders.
  • Computing Earned Revenue.
  • Cost in Excess/Billing in Excess Analysis – The ABCs of CIE & BIE.
  • Financial Statement Preparation & Analysis.
  • Cost Reporting Analysis.


Course outcomes:

Upon completion of this course, the student should be able to:
  • Identify key construction accounting principles.
  • Explain the core points of revenue recognition.
  • Discuss the importance of a job cost system.
  • Calculate earned revenue.
  • Identify what a construction company expects from its financial manager.
  • Use industry data to benchmark your company.