Research On Revenue Recognition In Construction Industry Based On The 2017 Edition Revenue Standard

Revenue is the core financial indicator of an enterprise.It is important for owners,operators and other stakeholders to interpret the financial status,operating results and cash flow of the enterprise and make correct economic decisions based on it.The revenue standards before 2017 had vague definitions for the recognition,measurement,and disclosure of certain revenues,and some early or late recognition of revenue followed by smoothing corporate profits to achieve the purpose of whitewashing financial statements.As a result,it misled the public and caused huge losses to investors and creditors.In 2017,the Ministry of Finance revised the "Accounting Standards for Enterprises No.14-Revenue"(hereinafter referred to as the "2017 edition revenue standard "),requiring that from January 1,2018,domestic and overseas listed companies begin to implement the standards.Other non-listed and domestic listed companies will be implemented in phases and phases,and will be fully implemented from January 1,2021.The revenue recognition of the construction industry used to implement the "Accounting Standards for Enterprises No.15-Construction Contracts",and the percentage of completion method was used to recognize revenue.From the perspective of the 2017 edition revenue standard,the revenue recognition that belongs to the performance of obligations within a certain period of time needs to be based on the progress of performance.The article uses comparative research method and case research method to study the revenue problem of the construction industry.First,it discusses the changes in revenue recognition mode and the theories related to revenue recognition,and clarifies the structure and specific content of this article.After that,the theories related to revenue standards were analyzed and discussed in detail,and the revenue content of the revenue standards and construction contract standards was introduced.At the same time,the 2017 edition revenue standard was briefly introduced,and the changes in the revenue standards were based on the comparative research method.Then a brief description of the business model of the construction industry and an analysis of the particularity of the revenue of the construction industry are made,a brief description of the completion percentage method of the construction contract standard,and a brief description of the five-step method of the2017 edition revenue standard.In the case analysis part,through the introduction of case projects,the revenue was recognized and measured from the construction contract standards and the 2017 edition revenue standard respectively,and the difficulties in revenue recognition and the potential impact of using the 2017 edition revenue standard were explained.Compared with the completion schedule of the applicable construction contract standards,there is a big difference between the calculation of the performance progress and the calculation of the revenue.In the conclusion part,the research results and research deficiencies of the thesis are explained,and the direction of future research on revenue in the construction field is pointed out.This article draws the following conclusions through comparative analysis and research: First,the difference between the 2017 edition revenue standard and the construction contract standard in terms of revenue recognition and measurement,and the difference in the judgment of the estimated total contract revenue,which is fundamental to the recognition and measurement of revenue.Second,there are significant differences in the recognition of contract assets,which in turn leads to changes in the performance progress and the completion progress measurement under the construction contract standards,thereby affecting the measurement of the amount of revenue.Third,the difference in the amount of revenue measurement and the difference in the confirmation of contract assets will have an impact on the statement items,and then affect the business analysis and decision-making of the enterprise.Fourth,the 2017 edition revenue standard is derived from the concept of assets and liabilities.The implementation of the standard makes revenue recognition more cautious and will reduce the occurrence of revenue fraud.The previous research focused on the financial impact of the implementation of the standards on enterprises.Through comparative research,we can clearly understand the similarities,differences and connections of the various standards,and applies the five-step model to specific project cases,which is conducive to fully understanding the standards,better applying theories to project practice,and facilitating future practical operations.At the same time,a certain discussion was made on the implementation of the standards,especially the accounting treatment during the implementation of the standards and the listing of statement items were clearly explained.The 2017 edition revenue standard will be implemented no later than January 1,2021.As one of the industries most affected by the standards,the construction industry understands and grasps the connotation and requirements of the standards,understands the impact of the applicable standards,and smoothly realizes the transition of the standards.The language has important practical significance.It is hoped that the research in this article can bring some lessons for companies to implement the 2017 edition revenue standard,reasonably determine the progress of project performance and realize the recognition,measurement and reporting of revenue.