This article questions the reliability of the amount of revenue recognized in the percentage of completion （POC） method of revenue recognition in construction industry and recommends a new method based on the progre...This article questions the reliability of the amount of revenue recognized in the percentage of completion （POC） method of revenue recognition in construction industry and recommends a new method based on the progress billing which is more reliable. The most commonly used method of revenue recognition in the construction industry is the percentage of completion method （POC）, where the revenue is recognized on the basis of the percentage of work completed. The calculation of percentage of work completed is made on the basis of the cost incurred for the contract work during the financial period and the cost required for completion of the work as estimated by the contractor. Here, the acceptance of the product by the buyer （contractee） is not involved in recognizing the revenue. The reliability of the amount of revenue and its collectability can be assured only when the buyer accepts the product. The approval of the progress bill by the contractee is needed to assure the reliability and collectability and it must be the event that triggers the recognition of revenue.展开更多
Successful and cost-effective construction relies upon appropriate communication of the participants of the construction project. Hence, it is important to define the rights and responsibilities of the parties, and re...Successful and cost-effective construction relies upon appropriate communication of the participants of the construction project. Hence, it is important to define the rights and responsibilities of the parties, and relationships among them. In this context, well-designed and complete agreement is essential and necessary for the successfully completion of a construction project within the desired time, quality and budget. In this paper, it is aimed to analyze and compare the owner-contractor agreements in the Turkish and the US construction industry. First, the importance of construction contracts and contractual elements of an agreement is determined, and then, the standard owner-contractor agreement which is used in the Turkish construction industry is analyzed and compared with the US standard owner-contractor agreement. Finally, the differences between these agreements are put forward, the lack and deficiencies of Turkish standard agreement form are determined, and appropriate suggestions are improved.展开更多
文摘This article questions the reliability of the amount of revenue recognized in the percentage of completion （POC） method of revenue recognition in construction industry and recommends a new method based on the progress billing which is more reliable. The most commonly used method of revenue recognition in the construction industry is the percentage of completion method （POC）, where the revenue is recognized on the basis of the percentage of work completed. The calculation of percentage of work completed is made on the basis of the cost incurred for the contract work during the financial period and the cost required for completion of the work as estimated by the contractor. Here, the acceptance of the product by the buyer （contractee） is not involved in recognizing the revenue. The reliability of the amount of revenue and its collectability can be assured only when the buyer accepts the product. The approval of the progress bill by the contractee is needed to assure the reliability and collectability and it must be the event that triggers the recognition of revenue.
文摘Successful and cost-effective construction relies upon appropriate communication of the participants of the construction project. Hence, it is important to define the rights and responsibilities of the parties, and relationships among them. In this context, well-designed and complete agreement is essential and necessary for the successfully completion of a construction project within the desired time, quality and budget. In this paper, it is aimed to analyze and compare the owner-contractor agreements in the Turkish and the US construction industry. First, the importance of construction contracts and contractual elements of an agreement is determined, and then, the standard owner-contractor agreement which is used in the Turkish construction industry is analyzed and compared with the US standard owner-contractor agreement. Finally, the differences between these agreements are put forward, the lack and deficiencies of Turkish standard agreement form are determined, and appropriate suggestions are improved.
