Good day,
I have a question concerning the timing of revenue from the sale of flats. We are a development company, which has built apartment buildings for sale as flats. I think we should recognized revenue when we meet the 5 conditions listed in IAS 18 for the sale of goods also in accordance with IFRIC 15 – or specifically, the date of transfer of control and risks of ownership in the CR which is the registration in the Land Registry.
Company management wants to recognize income on the date of acceptance from building inspection on the basis of firm commitment contracts for the sale of the flats. Management claims that it is more than likely that the sale will be completed given that a non-refundable deposit of 15% of the sales price (about ½ million Czech crowns) was paid.
My question is, is it appropriate to recognize revenue in a different (earlier) than the time of the transfer of ownership in the Land Register?
Thank you very much for your help.