Revenue Recognition – REAL ESTATE

PFRS 15, Revenue from Contracts with Customers, establishes a new five-step model that will apply to revenue arising from contracts with customers. Under PFRS
15, revenue is recognized at amount that reflect the consideration which an entity expects to be entitled in exchange for transferring goods or services to customers.
The principles in PFRS 15 provide a more structured approach to measuring and recognizing revenue.

This document consists of suggested substantive procedures1 to address the following:

 Part I – Revenue recognition (PFRS 15) Implementation2
 Part II – Substantive procedures (current)
o Part II.A – Revenue
o Part II.B – Contract Assets
o Part II.C – Installment Contract Receivables
o Part II.D – Contract Liabilities
o Part II.E – Customers Deposit
o Part II.F – Cost to Obtain a Contract
o Part II.G – Other set of PSPs/OSPs as needed per sector

1 Audit teams may identify relevant controls as regard an entity’s adoption of PFRS 15; thus, should refer to CONTROLS for considerations on controls. Guide to auditing IFRS 15 Revenue from
Contracts with Customers in the Appendix may also provide additional materials with regard controls. References to control testing in this document are contained in brackets – [*].
2 Further materials which guide teams in auditing and accounting considerations of PFRS 15 implementation are in the Appendix.

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Part I. Revenue recognition (PFRS 15) Implementation

Step Description of Procedures Other Considerations for Real Estate Example evidence from the entity EY documentation
Industry
1. Test the Perform substantive testing related to the amounts disclosed, including: • Contract analysis, whitepapers • Document our substantive testing of the
transition • Cumulative catch-up/retrospective adjustment amounts and the results of those tests
• Accounting policy
amount and
disclosures • Reconciliation of legacy revenue standard amounts vs. PFRS 15. • Reconciliation between existing
Review the results of any substantive testing performed to date as regard revenue and revenue under PFRS
the implementation, and related documentation with executives on the 15
audit team. • Calculations of the amounts that
will be disclosed in the financial
statements by revenue stream
• Final amounts disclosed in
financial statements
(1a) — Test the completeness of the population of contracts included in the • Reconciliation between existing • Document our procedures for the
Completeness transition adjustments (cumulative catch-up and comparative periods, if revenue and revenue under PFRS completeness of the revenue stream
applicable) by selecting a sample of contracts from outside of the revenue 15 population used to perform the revenue
stream population defined by management. For example, select adjustments based on the transition
• Calculations of amounts
contracts that comprise a historical backlog, deferred revenue or list of method. [This test could be performed
open contracts. as part of control testing as a dual
purpose test (if an integrated audit or
rely on controls strategy) or as an
attribute test as part of substantive
testing, or as a full contract review.]

(1b) If management used a sampling approach for contract analysis, test • Contract analysis, whitepapers • Documents our selection of a sample of
Homogenous whether all contracts within the stream have the same terms that result in an contracts within the revenue stream
• Accounting policy
population accounting consequence. [This test could be performed as part of control population not tested by management
testing as a dual purpose test (if an integrated audit or rely on controls • Reconciliation between existing and verify that the terms and conditions
strategy) or as an attribute test as part of substantive testing, or as a full revenue and revenue under that drive the accounting conclusions are
contract review and document our testing in the substantive workpapers.] PFRS 15 Calculations of amounts the same. This test could be performed as
part of control testing as a dual purpose
test (if an integrated audit or rely on
controls strategy) or as an attribute test
as part of substantive testing, or as a full
contract review.

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 Step Description of Procedures Other Considerations for Real Estate Example evidence from the entity EY documentation
Industry
(1c) Test the inputs to the calculations of the transition adjustments • Reconciliation between existing • Document our procedures to test the
Inputs (cumulative catch-up and comparative periods, if applicable) (1) inputs revenue and revenue under PFRS inputs used to perform the calculations
for calculations under legacy PFRS (likely already tested as part of the 15 used in the revenue adjustments. This
audit of current year revenue) and (2) new inputs for calculations under test could be performed as part of
• Calculations of amounts
PFRS 15. control testing as a dual purpose test (if
[In an integrated audit or if we adopt a controls reliance approach, for the an integrated audit or rely on controls
new inputs under PFRS 15, we will need to test the accuracy of these strategy) or as an attribute test as part of
inputs through our substantive testing, if not already performed as part of substantive testing, or as a full contract
controls.] review.

(1d) Evaluate and test IPE risks, if not already performed as part of controls (if • Reconciliation between existing • Document our testing of how we
IPE an integrated audit or rely on controls strategy). revenue and revenue under PFRS addressed IPE risks
15
• Calculations of amounts
(1e) Read final accounting white papers and policy and determine whether we • Contract analysis, whitepapers • Documents our analysis of the
Evaluate the agree with application of the accounting framework. application of the accounting framework
• Accounting policy
application of Perform substantive testing related to the application of the five-step overall. For the contract level analysis,
the accounting model in the accounting standard. • Reconciliation between existing document the execution of our testing of
framework revenue and revenue under PFRS the application of the accounting
overall and at  For revenue streams that do not have an accounting change, we 15 framework at the contract level.
the contract would typically expect that the team consider selecting a judgmental
sample of contracts to independently verify the entity’s application • Calculations of the amounts that
level will be disclosed in the financial
of the accounting framework at the contract level in order to
evaluate the entity’s conclusion. statements by revenue stream

 For revenue streams that have an accounting change, select a • Final amounts disclosed in
sample of contracts for each revenue stream and perform the next financial statements
steps below:
(1e.1) • Test a sample of arrangements with customers to determine whether
the arrangement meet the definition of a contract with a customer.

• Test a sample of contracts entered into at or near the same time with the
same customer (or related parties of the customer) to determine whether
they meet the criteria to be combined and accounted for as a single contract.

• Test a sample of contracts to determine whether the entity has

appropriately accounted for contract modifications, or applied the
practical expedient appropriately during the transition period.

(1e.2) • Test a sample of contracts to determine whether all performance

obligations within contracts with customers have been appropriately
identified.

3
Step Description of Procedures Other Considerations for Real Estate Example evidence from the entity EY documentation
Industry

(1e.3) • Test a sample of contracts to determine whether management

properly identified and estimated all components of the transaction
price, including variable consideration and the application of the
constraint, or whether management appropriately applied the
practical expedient related to estimating the transaction price, if
using the full retrospective method of adoption.

(1e.4) • Test a sample of contracts to determine whether the allocation of

the transaction price to the performance obligations is appropriate.
• Test management’s estimate and underlying assumptions of the
standalone selling price for each performance obligation included
within a sample of contracts. Determine whether management
considered all reasonably available information (including market
conditions, entity-specific factors and information about the
customer or class of customer) when determining the standalone
selling price
• Test a sample of contracts to determine whether the timing of
revenue recognition is appropriate based on when performance
occurs and control of the related goods or services is transferred to
the customer.
• Test the application of the portfolio approach, including
management’s quantitative and qualitative analysis that supports
their conclusion that the accounting result is not materially different
than if the standard was applied to individual contracts.
• If a practical expedient is used, test the use of the expedient by the
entity.
• Test a sample of contracts to determine whether they contain
licenses of intellectual property and if so, if the license is accounted
for appropriately in accordance with PFRS 15.
• Test a sample of contracts to determine whether the costs to obtain
and fulfill contracts should be capitalized.
• Test a sample of contracts to determine whether the amortization
method for costs to obtain or fulfill a contract that are capitalized is
performed on a systematic basis that is consistent with the transfer
to the customer of the goods or services to which the asset relates.
• Test a sample of contracts to determine whether the amortization
period for costs to obtain or fulfill a contract that are capitalized is
over the expected period of benefit.

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 Step Description of Procedures Other Considerations for Real Estate Example evidence from the entity EY documentation
Industry

(1f) If we determine that tests of details over revenue are necessary, we must • Contract analysis, whitepapers • Document our key items criteria and
Key items first consider whether there are any key items3 that should be tested selections and perform contract reviews
• Accounting policy
separately. to test the application of the accounting
• Calculations of the amounts that framework at the contract level and the
Note: For revenue streams that have an accounting change, we would will be disclosed in the financial
typically expect that key items are identified and tested. accuracy of management's computed
statements by revenue stream adjustments for that revenue stream
• Reconciliation between existing
revenue and revenue under PFRS
15
(1g) If additional evidence is necessary, consider selecting a representative • Contract analysis, whitepapers • Document our selection criteria and
Representative sample for revenue streams with an accounting change and perform perform contract reviews to test the
sampling • Accounting policy
contract reviews to test the application of the accounting framework at the application of the accounting framework
contract level and the accuracy of management's computed adjustments • Reconciliation between existing at the contract level and the accuracy of
for that revenue stream. MicroSTART is an appropriate tool to use to revenue and revenue under PFRS management's computed adjustments
determine the sample size. Consider using some samples that were 15 for that revenue stream
tested during control testing as dual purpose tests. • Calculations of the amounts that
will be disclosed in the financial
statements by revenue stream
1(h) Based on the above testing, evaluate if the balance sheet accounts were • Contract analysis, whitepapers • Document our selection criteria and
Evaluate testing sufficiently tested through the completeness and valuation procedures perform contract reviews to test the
• Accounting policy
outlined above or if additional or direct testing of these accounts is application of the accounting framework
necessary, e.g., testing contract assets to make sure they are • Reconciliation between existing at the contract level and the accuracy of
appropriately classified, performing cut-off procedures for the revenue and revenue under PFRS management's computed adjustments
retrospective periods, testing changes in the balance sheet across periods 15 for that revenue stream
where contract assets become receivables and then cash. • Calculations of the amounts that
will be disclosed in the financial
statements by revenue stream
• Final amounts disclosed in
financial statements

3 Key items are items that are individually significant to a significant class of transactions (SCOT) or significant account balance. Key items can be significant because of their size — that is, there is a risk of material misstatement simply because these items are so
large — or due to qualitative risk factors. Because key items are not representative of the population as a whole, the results of our testing of these items cannot be projected to the rest of the population. It is important to consider and document our consideration of
both types of key items when designing our procedures and why we believe these items are not representative of the population. Guidance on key items can be found in SUBSTANTIVE TOD 2.1.

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 Step Description of Procedures Other Considerations for Real Estate Example evidence from the entity EY documentation
Industry
(1i) Perform [controls (if an integrated audit or rely on controls strategy) and] • Draft tax questionnaires, • Document our procedures to evaluate
Test tax effects substantive testing related to the tax amounts disclosed (or tax methods or differences identifier the design and operating effectiveness
of transition adjustments presented net) related to the adoption. tools and calculations of tax accounting controls, including
adjustments This evaluation should include procedures related to the following: documenting the tax review and evidence of precision (if an integrated
tax accounting conclusions for audit or rely on controls strategy), and
• Management’s computation of tax accounting adjustments for all each revenue stream, including our substantive procedures to test the
periods presented, including how the revised amounts were questions and items identified for tax effects by revenue stream of the
computed, reviewed and approved and the relevant IPE follow up by the reviewer and adoption
considerations documentation of how these
items were ultimately resolved
• Final tax calculations
documenting tax methods and
accounting conclusions for each
revenue stream with evidence of
approval
2 Review disclosures related to the prospective accounting for material • Discussion about how the • Document our procedures to review the
modifications from legacy PFRS amounts in the financial disclosures in the notes to the financial
statements were derived by statements, including inquiries of
revenue stream, including the management, comparison of disclosure
completeness and accuracy of to the requirements in legacy PFRS,
these amounts and how the review of the International GAAP®
accounting policy was applied to disclosure checklist completed by
the contracts in order to compute management, consideration of our
the amounts in the disclosure understanding of the application of the
• Completed International GAAP® accounting framework to contracts with
Disclosure Checklist customers and comparison of
management’s disclosures in the notes
• Final disclosures to the annual financial statements

Part II – Substantive procedures (current)

Part II.A – REVENUE (REAL ESTATE SALES)

6
 Assertions Primary substantive procedure REAL ESTATE considerations
Title

For each revenue SCOT, obtain and read significant revenue arrangements entered into
by the entity during the period and perform inquiries to understand the nature of the
arrangements. Obtain and evaluate the entity’s accounting policy used to recognize
revenue in accordance with the applicable financial reporting framework. Based on our
understanding of the nature of revenue arrangements, determine the effect on our
planned substantive procedures and extent of testing.

UA-01-GL: Understand revenue

IS: O, C
arrangements Determine whether the arrangement is appropriately identified as a contract with a
customer in accordance with PFRS 15or whether the arrangement is appropriately
accounted for under other accounting guidance (e.g., lease accounting)

Understand contract terms that could affect revenue recognition from contracts with
customers, including cancellation/termination penalties, modifications to existing
contracts, multiple contracts entered into at the same time with the same customer,
licenses of intellectual property, free or optional goods or services, tiered pricing,
discounts, incentives or customer acceptance terms
For each revenue SCOT, obtain details of the underlying transactions and reconcile to
the general ledger for the period.

 Determine an appropriate testing threshold (____% of TE). For all reconciling items
greater than the threshold, examine supporting documentation to determine their
validity. Identify items that meet qualitative criteria that indicate that they are
more likely to contain material misstatements (e.g., they are unusual based on our
understanding of the entity and the relevant SCOTs or have a history of
UA-02-GL: Reconcile general misstatement). Document the basis for this determination and examine supporting
IS: O, C documentation to determine their validity.
ledger/ compare balances

 Compare the revenue balances for the period with the prior period. When we
identify an unusual or unexpected change or the lack of an expected change,
obtain an understanding of the reasons for the change, determine the effect on our
planned substantive procedures and document the basis for the determination.

 Perform testing over the IPE used in the general ledger reconciliation and
document how we satisfied ourselves regarding its reliability.
Disaggregated revenue data can include disaggregation by project, by
geographical area, by segment.
Determine whether to perform substantive analytical procedures to verify occurrence,
measurement and completeness using disaggregated revenue data (e.g., by month,
Perform gross profit analysis (e.g., compare CY gross profit against PY
quarter, product line, customer class, subsidiary, division, operating unit, type of
UA-03-GL: Perform substantive gross profit per project, compare CY gross profit per geographical area,
IS: O,M,C product/service). When we decide to do so, determine and document the basis for our
analytical procedures segment, etc.)
expectation of the balance of revenue or changes in the account(s) that is sufficiently
precise to identify a misstatement. The expectation needs to be quantifiable and its
Some notes to check prior to performing the substantive analytical
basis readily identifiable and supportable.
procedures (IPE testing and some may be covered by other revenue
recognition procedures):

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 Assertions Primary substantive procedure REAL ESTATE considerations
Title

a. Ensure that for installment sales, the transaction price is exclusive

of the significant financing component as determined under PFRS
15.
b. Ensure that the transaction price to be multiplied by the percentage
of completion (POC) does not include the related VAT.
c. Ensure that POC per project is based on POC as audited based
results of Test of reasonableness of POC procedures below.
d. Ensure that buyer’s equity percentage is based on the results of Test
of collection threshold procedures below.
e. Obtain sales cancellation for the year to validate completeness of the
cancelled sales transactions recorded in the books. Ensure that for
every cancelled sale during the year, the corresponding AR, revenue
and related capitalized cost to obtain the contract were also
reversed or expensed, as applicable.
f. Perform matching of sales with inventory using buyer’s details to
ensure that units included in the sales summary have already been
taken out of the inventory listing.
g. Test the mathematical accuracy of the application of POC to the
transaction price.

Considering our expectations and determined level of precision, establish our variance
threshold (the amount of difference between the recorded amount and our expectation
that is acceptable without further investigation). Investigate the variances from our
expectations, taking into consideration our variance threshold.

Document how we satisfied ourselves regarding the reliability of the underlying data,
including IPE, used in the substantive analytical procedures.
1. For contracts which started recognizing revenue during the year:
When substantive analytical procedures cannot be performed or the evidence obtained
is insufficient to conclude upon the account balance, perform tests of details by A. Determine if criteria for a contract are met
selecting key items and, when necessary, a representative sample from the defined
populations within each revenue SCOT. For each item selected, obtain and inspect supporting evidence (e.g.,
executed CTS, reservation agreement, cash receipts, invoice, etc.) and
determine whether:
Based on our understanding of the nature of the contracts entered into by the entity,
determine the populations for testing (e.g., detail used for the account reconciliation,
• The entity properly assessed if it is a principal or agent in the contract
UA-04-GL: Perform tests of details IS: O, M, P&D contract listings) and the sampling unit (e.g., invoices, MSAs) for the tests of details. The
• The entity has recognized revenue in accordance with PFRS 15
tests of details may involve different sampling units from different populations.

For each item selected, obtain and inspect supporting evidence (e.g., executed contract, 1. A contract creates enforceable rights and obligations and meets
cash receipts, invoice) and determine whether: criteria to be accounted for as a contract with a customer (based
on the required criteria under PFRS 15 paragraph 9). If the
company considers alternative documentation other than the CTS
 The entity properly assessed if it is a principal or agent in the contract to qualify for revenue recognition, the audit team should obtain a

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 Assertions Primary substantive procedure REAL ESTATE considerations
Title
 The entity has recognized revenue in accordance with the accounting position paper from the Company’s legal counsel on the basis as
framework to why the alternative documentation provides for the enforceable
rights and obligations. If criteria of a contract are not met, ensure
Perform procedures to determine whether: that cash collections are recorded as contract liabilities.
2. Assess if prior year arrangements which has not met definition of
 A contract creates enforceable rights and obligations and meets criteria to be contracts have been met in the current period.
accounted for as a contract with a customer 3. Contracts are appropriately combined (e.g. CTS can be combined)
4. Contract modifications are appropriately recognized more likely
 Contracts are appropriately combined arising from change in units or revised payment schemes.
 Contract modifications are appropriately recognized 5. The entity has appropriately identified the promised goods or
services within the contract and determined which are separate
 The entity has appropriately identified the promised goods or services within performance obligations.
the contract and determined which are separate performance obligations Please refer to Issues B&C of PIC QA 2018-12 for specific
guidance as it applies to the products of the entity.
 The entity has appropriately identified and estimated all components of the 6. The entity has appropriately identified and estimated all
transaction price and has appropriately constrained any variable components of the transaction price and has appropriately
consideration constrained any variable consideration.
 The transaction price is allocated to the performance obligations based on the Ensure that if there is a portion of miscellaneous fees collected
appropriately determined standalone selling price from buyers in excess of those intended for taxes and registration
fees related to transfer of title to the buyer, this will have to be
 The entity recognized revenue in the correct period when (or as) the evaluated if such is part of the transaction price.
performance obligations are satisfied 7. The transaction price is allocated to the performance obligations.
8. Estimates used in revenue are appropriately identified and
 Estimates used in revenue are appropriately identified and recorded recorded
 Licenses of intellectual property are appropriately identified and accounted
for
Refer to AS-GUIDANCE UA: Revenue for guidance. B. Test of Propriety of Buyer’s Equity for Revenue Recognition

Document how we satisfied ourselves regarding the reliability of the underlying data, i. Test of Reasonableness
including IPE, used in this PSP.
This procedure is to determine the reasonableness of the collection
For key items, record any misstatements on our SAD as factual misstatements. threshold set by the Company. The test of accounting for sales
cancellations is covered in F procedures for inventories.

1. Obtain historical schedule of sales cancellation per segment for

those contracts with recognized revenue. Ensure that sales
cancellations only pertain to actual cancellation (i.e., excluding
change units, booking errors, buyer’s cancellation due to project
For the representative sample, when we have determined that identified misstatements
delays, etc.)
are representative of the population, project the known representative misstatements to
2. Compare the number (i.e., count) and monetary value of related
the entire population. Record the projected representative misstatement on our SAD as
sales of contracts subsequently cancelled for a particular year
a judgmental misstatement.
against the total number and total monetary value of sales for that
year.
3. Assess the reasonableness of collection threshold based on the
resulting historical sales cancellation percentage (based on
frequency and monetary value) per year. If resulting percentages
are significant (based on the team’s judgment), determine the

9
 Assertions Primary substantive procedure REAL ESTATE considerations
Title
level of collection where the cancellation is already minimal.
Challenge the collection threshold set by management.
4. Obtain explanation from management for any unusual level of
cancellation.

ii. Test of qualification for revenue recognition whether the contracts

meet the collection threshold criteria.

1. Using the samples selected in UA-04-1A, vouch the collections

during the year to applicable source documents.
2. Compare the total collections to date against the total contract
price. Ensure that both collections and contract price are VAT
exclusive.
3. Determine whether the collection threshold per company policy
has been met.
4. For contracts with booked revenues but with collections below the
threshold, inquire the rationale with management and perform
additional procedures to corroborate management’s
representation.

2. For all contracts with recognized revenue:

A. Test of Reasonableness of POC

1. Obtain an understanding of the Company’s determination of POC
process.
2. Obtain the company’s revenue schedule.
3. Select samples using parameters set based on the team’s
judgment, which can include the following:
• Projects with % share to total real estate revenue of XX% or
more
• Projects with % share to total inventories of XX% or more
• Projects with increase in POC from PY of XX% or more
• New project during the year with significant revenue arising
from movement in POC.
4. Perform the procedures below to test the reasonableness of the
POC depending on the Company’s measurement of progress for
revenue.

i. Based on Output Method

1. Agree the POC used per project in the revenue schedule with the
POC certified by the project engineers (can be internal or external
project engineers or surveyors).
2. Perform an understanding of processes and controls in the total
project activities and milestones.
3. Assess the competence and objectivity of the project engineers by
reference to their qualifications, experience and reporting

10
 Assertions Primary substantive procedure REAL ESTATE considerations
Title
responsibilities. Accomplish “130(GL) - Using the work of
management's specialist form”.
4. On a sample basis, vouch the certified POC against supporting
documents such as accomplishment reports from the contractors
and sub-contractors, project evaluation reports from external
surveyors and accomplishment schedules.
5. Assess on the general level the reasonableness of POC in relation
to the status of the project during the ocular inspection and results
of on-site inquiry (Conduct Site Visit Section).
6. Inquire with management for material differences, if any, and
obtain supporting documentation.

ii. Based on Input Method

1. Agree the POC used per project in the revenue schedule with the
POC certified by the Company’s project engineers.
2. Perform an understanding the processes and controls of the
preparation of cost estimates, updating of cost estimates and cost
accumulation. Refer to the work performed under Cost of Sales.
3. If the engineers are involved in the calculation of POC based on
input method, assess the competence and objectivity of the
project engineers by reference to their qualifications, experience
and reporting responsibilities. Accomplish “130(GL) - Using the
work of management's specialist form”.
4. To test the certified POC for selected projects:
a. Numerator – On a sample basis (refer to GAM for sampling
guidance), vouch the actual cost incurred against supporting
documents such as progress billings, invoices, supporting
evidences for accruals. In reference to the results of the
team’s procedures on search for unrecorded liabilities,
consider those completed progress of work which are not yet
billed and accrued.
b. Denominator – Obtain approved total estimated project cost
estimates for new projects and compare against awarded
contract price. Ensure that the total project cost is the most
updated. Please refer to Cost of Sales Procedures for the
testing of the total project cost estimates.

5. For both numerator and denominator, ensure validity and propriety

of costs included in the computation in reference to PIC Q&A
2018-12. Ensure that wasted materials and inefficiencies, land,
borrowing costs, connection fees and uninstalled materials are
excluded in the formula.
6. Assess on the general level the reasonableness of POC in relation
to the status of the project during the ocular inspection and results
of on-site inquiry (Conduct Site Visit Section).

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 Assertions Primary substantive procedure REAL ESTATE considerations
Title
7. Inquire with management for material differences, if any, and
obtain supporting documentation.

Obtain a list of debit balances within revenue to validate that revenue has been recorded
in accordance with the entity’s accounting policy and the applicable financial reporting
framework (e.g., to identify potential price concessions that may not have been properly
accounted for). Evaluate whether the list is sufficiently reliable for our purpose (i.e.,
identify and test IPE).

UA-05-GL: Test debit balances IS: O, C

Considering our understanding of the business, the entity’s accounting policy and the
relevant SCOTs, identify and investigate any unusual items (e.g., they are unusual based
on our understanding of the entity and the relevant SCOTs, have a higher risk of material
misstatement in the account due to the CRA or a history of misstatement). Determine
whether further testing (such as tests of details) is necessary for these balances.

When we perform substantive procedures at an interim date, perform the following

rollforward procedures to an extent that provides a reasonable basis for extending our
audit conclusions at the date of our interim procedures to the period-end date:

Perform inquiries of appropriate personnel (e.g., sales managers, legal counsel) to

confirm our understanding of any changes to terms and conditions in the rollforward
period.

Confirm that there have been no significant changes during the rollforward period in the
control environment, and in controls relevant to the significant account (if applicable).
UA-06-GL: Perform rollforward
IS: O, M, C, P&D
procedures
Update our lead sheets to compare the account balances at the balance sheet date with
the interim date and with the prior period. Agree our lead sheets to the general ledger.
When we identify an unusual or unexpected change or the lack of an expected change,
we obtain an understanding of the reasons for the change and determine whether further
testing is necessary.

Perform rollforward analytical procedures and/or tests of details for transactions in the
rollforward period.

Perform appropriate testing over the IPE used in the performance of the rollforward
procedures and document how we satisfied ourselves regarding its reliability.

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 Assertions Primary substantive procedure REAL ESTATE considerations
Title
Perform procedures to test revenue cutoff at the period-end date to determine whether
transactions are recorded in the proper period and to the proper accounts (e.g., trade
receivables, deferred revenue, and revenue). For revenue recognized under PFRS 15, this
extends to transactions recorded in contract assets and contract liabilities.
UA-07-GL: Perform cutoff
IS: O, C
procedures When we perform substantive procedures at an interim date, we also perform revenue
and trade receivables cutoff testing at that date.

Perform appropriate testing over the IPE used in the performance of cutoff procedures
and document how we satisfied ourselves regarding its reliability.

Obtain sufficient appropriate audit evidence about whether the disclosures in the
financial statements related to revenue are in accordance with the requirements of the
entity’s accounting policy and the applicable financial reporting framework.
Refer to the Real Estate industry illustrative disclosures and accomplish
Verify that the items selected in PSP UA-04 are appropriately presented in the financial
the IFRS disclosure checklist.
statements or disclosures to the financial statements (e.g., product revenue or service
revenue).

Perform appropriate testing over the IPE used to test disclosures in the financial
statements related to revenue and document how we satisfied ourselves regarding its
reliability.
UA-08-GL: Test financial
statement disclosure and IS: P&D Evaluate whether the disclosures enable users of financial statements to understand the
presentation nature, amount, timing and uncertainty of revenue and cash flows arising from contracts
with customers and properly include qualitative and quantitative information about (1)
the contracts with customers, including disaggregation of revenue, contract asset and
liability balances, and information about performance obligations (2) the significant
judgments and changes in judgments made in applying the guidance to those contracts
and (3) any assets recognized from the costs to obtain or fulfill a contract with a
customer.

When we determine an accounting estimate related to revenue is a significant risk

estimate, evaluate the adequacy of the disclosure of the estimation uncertainty in the
financial statements in the context of the applicable financial reporting framework

Part II.B – CONTRACT ASSETS

For a Real Estate Company, CONTRACT ASSET is the excess of receivable per POC over the billed receivables (i.e., installment contracts receivable).

13
 Title Assertions Primary substantive procedure Real estate sector considerations
Based on the team's understanding of the revenue arrangements,
determine instances where the entity has a conditional right to
Obtain from the entity the contract assets subledger and a reconciliation of the consideration (e.g., entities with cost-plus revenue arrangement may
subledger to the general ledger as of the period end date. Trace the balances from the entitle them to recognize revenue through contract assets until the
reconciliation to the subledger and the general ledger / our lead sheet. delivery of the related products).

Determine an appropriate testing threshold (____% of TE). For all reconciling items
greater than the threshold, examine supporting documentation to determine their
validity. Identify items that meet qualitative criteria that indicate that they are more
GUA-01-GL: Reconcile subledger likely to contain material misstatements (e.g., they are unusual based on our
with general ledger/ obtain and BS: E, C understanding of the entity and the relevant SCOTs or have a history of misstatement).
compare balances Document the basis for this determination and examine supporting documentation to
determine their validity.

Compare the contract asset balances as of period end with that at the prior period end.
When we identify an unusual or unexpected change or the lack of an expected change,
obtain an understanding of the reasons for the change, document the basis for this
determination and determine the effect on our planned substantive procedures.

Evaluate whether the reconciliation and the subledger are sufficiently reliable for our
purpose (i.e., identify and test IPE).

Determine whether to perform substantive analytical procedures to verify

completeness, existence and valuation. When we decide to do so, determine our
expectation of the balance of contract assets or changes in the account that is
sufficiently precise to identify a misstatement. The expectation needs to be quantifiable
and its basis readily identifiable and supportable.

GUA-02-GL: Perform substantive Considering our expectations and identified level of precision, determine our variance
BS: E, V, C
analytical procedures threshold (the amount of difference between the recorded amount of contract assets
and our expectation that is acceptable without further investigation).

Investigate the variances from our expectations, taking into consideration our variance
threshold. Obtain sufficient evidence that the variances are appropriate.

Document how we satisfied ourselves regarding the reliability of the underlying data
used in the substantive analytical procedures.

14
 Title Assertions Primary substantive procedure Real estate sector considerations

When the evidence obtained from the substantive analytical procedures is insufficient
to conclude upon the account balance, perform tests of details (consider whether
testing can be performed in conjunction with revenue tests of details procedures).

Verify existence and valuation of contract assets recorded through examination of

supporting documents (e.g., executed contracts, evidence of the entity’s performance
to date (control has transferred to customer)) for key items and, when necessary, a
representative sample to determine whether assets are recorded appropriately in
accordance with the entity’s accounting policies and PFRS 15/ASC 606 (e.g., the entity
has performed by transferring a good or service to the customer, but the entity’s right to
consideration is conditional upon something other than the passage of time).

GUA-03-GL: Perform tests of BS: E, V, P&D,

details R&O Document how we satisfied ourselves regarding the reliability of the underlying data
used, including IPE, used in the tests of details.

Evaluate the results of our tests of details to determine whether the evidence obtained
from the substantive analytical procedures, key items and audit sampling (when
applicable) have provided a reasonable basis for a conclusion about the population
tested.

For key items, record any misstatements on our summary of audit differences as factual
misstatements.

For the representative sample, when we have determined that identified misstatements
are representative of the population, project the known representative misstatements
to the entire population. Record the projected representative misstatement on our
summary of audit differences.

Determine whether the entity has appropriately assessed contract assets for
impairment and verify that the appropriate adjustments are made in accordance with
the entity's accounting policies and the applicable financial reporting framework.

GUA-04-GL: Test for impairment BS: E, V, P&D

Consider evidence obtained from the performance of other audit procedures which may
indicate potential impairment (e.g., results of analytical review procedures, review of
meeting minutes and key contracts), including evidence that may contradict
management’s assertions.

15
 Title Assertions Primary substantive procedure Real estate sector considerations

When an impairment loss has been recorded, perform procedures to test the amount
and the timing of the impairment recorded. Evaluate whether the impairment
calculation and the underlying data is sufficiently reliable for our purpose (i.e., identify
and test IPE). Document our evaluation of relevant and reliable information that may
contradict management’s estimate and assertions.

When we perform substantive procedures at an interim date, perform the following

rollforward procedures to an extent that provides a reasonable basis for extending our
audit conclusions at the date of our interim procedures to the balance sheet date:

Perform inquiries of appropriate personnel to confirm our understanding of any

changes in the rollforward period.

Confirm that there have been no significant changes during the rollforward period in
GUA-05-GL: Perform rollforward the control environment, and in controls relevant to the significant account (if
BS: E, V, C
procedures applicable).

Update our lead sheets to compare the account balances at the balance sheet date
with the interim date. When we identify an unusual or unexpected change or the lack of
an expected change, we obtain an understanding of the reasons for the change and
determine whether further testing is necessary.

Perform rollforward analytical procedures and/or tests of details for transactions in

the rollforward period.

Evaluate the adequacy of other adjustments to contract assets. Review the detail and
obtain an understanding for any unusual items (e.g., they are unusual based on our
understanding of the entity and the relevant SCOTs or have a history of misstatement).
Determine whether further testing (e.g., inspection of source documentation) is
GUA-06-GL: Evaluate other necessary.
BS: E, C
adjustments to contract assets
Consider the results of our revenue cutoff testing and determine if additional testing is
necessary on the classification of assets related to revenue.

Evaluate whether the detail of other adjustments to contract assets is sufficiently

reliable for our purpose (i.e., identify and test IPE).

16
PART II.C – INSTALLMENT CONTRACT RECEIVABLES

For a Real Estate Company, INSTALLMENT CONTRACTS RECEIVABLE is the uncollected receivable based on the amortization schedule, excluding any SFC.
PSPs

Title Assertions Primary Substantive Procedure Real estate sector considerations

E-01-GL: BS: E, C Obtain the subsidiary ledger (SL) with sufficient details, including (teams to customize as applicable):
Agreement of a. contract number
subledger with b. customer name
general ledger c. outstanding balance
d. project name (e.g. name of subdivision or village)
e. block/lot/unit number
f. total contract price
g. percentage of completion
h. borrowing rate used in significant financing component computation
i. movement in balance (principal and significant financing component) with the following details:
- Beginning balance
- Additional receivables for increment in POC
- Payments
- Ending Balance

Agree balances of the reviewed SL and general ledger (GL). In case of variances, obtain for reconciliation from
management and propose for adjustment as necessary. Consider results of procedures performed on bank
reconciliation (e.g. unidentified receipts), customers’ deposit and real estate sales..

E-02-GL: BS: E Note: Audit teams should revisit prior year response rate on customer account confirmation. If based on historical
Verification of experience, if the response rate does not achieve the objective of this procedure, the team may decide not to proceed.
existence of This strategy should be approved by the EQR. The working papers should contain documentation of rationale for not
contracts doing the confirmation and the alternative procedures to cover the assertions of confirmation.
receivables
1. Using EY Microstart and EY Sampling Assistant, select the samples that will be subjected to verification of
existence. In the selection of representative sample, consider the guidance provided in “SAMPLE: 4 Sampling for
tests of details ” (i.e., assurance obtained from other substantive procedures, expected misstatements, etc.)
2. Request management to prepare confirmation letters for the customer accounts selected, using the confirmation
template provided by SGV. Confirmation letters should include details of the contract with the customer (e.g.,
project name, block/lot number, total floor area, total contract price, amortization schedule, etc.) as well as the
buyer’s statement of account as of cut-off date. Confirmation letters should be sent by the audit team.
3. Confirmation replies should be directly sent to SGV. Compare the amount per confirmation reply with the gross
customer balance (without POC) and request reconciliation from management should there be any variance.

Alternative procedures (if no confirmation was done):

1. Using EY Microstart and EY Sampling Assistant, select the samples that will be subjected to verification of
existence. In the selection of representative sample, consider the guidance provided in “SAMPLE: 4 Sampling for
tests of details ” (i.e., assurance obtained from other substantive procedures, expected misstatements, etc.)
2. Using the samples selected, perform the following test of details:
i. For new contracts, trace the samples to the contract with customer to verify existence and to check if
the balance reflected as contract price is correct. Perform procedures if these met the criteria of a
contract under PFRS 15.

17
 Title Assertions Primary Substantive Procedure Real estate sector considerations
ii. For old contracts, trace the beginning balance to prior year SL ending balance.
iii. Vouch payments for the year to official receipts. (Alternatively, the team can rely on collection report if
sufficient procedures were performed on the client's collection report, including but not limited to
understanding, walkthrough, TOC and IPE.)
iv. Determine the “should be” outstanding balance of receivables (excluding contract asset) based on the
preceding procedures. Refer to GUA for procedures on contract assets.
3. Compare the balance computed in 2.iv with the balance per SL of billed receivables.
Request for reconciliation from management for variances, if any.
E-03-GL: BS: E, C, V
Review the “roll-forward” of activity from the interim date to the balance sheet date.
Rollforward
procedures
(applicable if For samples selected in E-02, extend the procedures from interim date to the balance sheet date.
E-02 was
performed at Test the existence of new transactions after the interim date which are outstanding as of the balance sheet date.
an interim
date) Investigate unusual items/movements.
E-04-GL: Other BS: E, C
adjustments to
accounts Review the appropriateness of other adjustments to accounts receivables, such as rebates, credit memos, discounts.
receivable

Based on the results of the review in procedure 1, team to consider whether test of details should be performed.

E-05-GL: BS: E, C
Credit Review the SL obtained in E1 for credit balances and unusual items (including non-moving balances).
balances and
unusual items
Inquire with management as necessary.

OSPs

Title Assertions Other Substantive Procedure Real estate sector considerations

E-06-GL: Accounts BS: V
receivable in foreign Obtain outstanding balance of receivables denominated in foreign currency.
currencies
Convert to the Company’s reporting and presentation currency using the foreign exchange rates obtained from
appropriate sources (e.g., BSP, PDS)

Inquire with management material variances, if any.

BS: E, C, R&O,
P&D Obtain schedule of sold/assigned contracts receivables and test the mathematical accuracy of the schedule.

18
 Title Assertions Other Substantive Procedure Real estate sector considerations
E-07-GL: Review of
assignment/sale of Read and review the agreement on the sale/assignment of contract receivables with the bank.
contracts receivables
Obtain and review management’s assessment if the sale/assignment of contracts receivable given the
requirements of the applicable standard (e.g., IFRS 9, etc.) will result in derecognition of the related contract
receivables or not. If the sale/assignment will result in derecognition of contract receivables, determine if the
sold/assigned contracts receivables are excluded from the SL used in the SL-GL reconciliation procedure.
Trace proceeds of sale/assignment of contracts receivables to bank statement. Discuss with management if
there are significant variances.

Cross refer to the results of loan confirmation with banks.

19
Part II.D – CONTRACT LIABILITIES
For a Real Estate Company, CONTRACT LIABILITY is the excess of collection over progress of work (e.g. POC) of the developer.

Title Assertions Primary substantive procedure Real estate sector considerations

Obtain from the entity the contract liabilities subledger and a reconciliation of the
subledger to the general ledger as of the period end date. Trace the balances from the
reconciliation to the subledger and the general ledger / our lead sheet.

Determine an appropriate testing threshold (____% of TE). For all reconciling items greater
than the threshold, examine supporting documentation to determine their validity. Identify
items that meet qualitative criteria that indicate that they are more likely to contain material
misstatements (e.g., they are unusual based on our understanding of the entity and the
PUA-01-GL: Reconcile subledger relevant SCOTs or have a history of misstatement). Document the basis for this
with general ledger/ obtain and BS: E, C determination and examine supporting documentation to determine their validity.
compare balances

Compare the contract liabilities balances as of period end with that at the prior period end.
When we identify an unusual or unexpected change or the lack of an expected change,
obtain an understanding of the reasons for the change, document the basis for this
determination and determine the effect on our planned substantive procedures.

Evaluate whether the reconciliation and the subledger are sufficiently reliable for our
purpose (i.e., identify and test IPE).

Determine whether to perform substantive analytical procedures. When we decide to do so,

determine our expectation of the balance of contract liabilities or changes in the account
that is sufficiently precise to identify a misstatement. The expectation needs to be
quantifiable and its basis readily identifiable and supportable.

PUA-02-GL: Perform substantive Considering our expectations and identified level of precision, determine our variance
BS: E, V threshold (the amount of difference between the recorded amount of contract liabilities and
analytical procedures
our expectation that is acceptable without further investigation). Investigate the variances
from our expectations, taking into consideration our variance threshold. Obtain sufficient
evidence that the variances are appropriate.

Document how we satisfied ourselves regarding the reliability of the underlying data used in
the substantive analytical procedures.

20
 Title Assertions Primary substantive procedure Real estate sector considerations

When the evidence obtained from the substantive analytical procedures is insufficient to
conclude upon the account balance, perform tests of details (consider whether testing can
be performed in conjunction with revenue tests of details procedures). Test significant
contract liability balances and agree to source documents (e.g., executed contracts,
PUA-03-GL: Perform tests of BS: E, V, R&O, payment remittances) to determine whether the entity appropriately recognized a contract
details P&D liability when the entity has received consideration, but has not yet transferred control of the
good or service to the customer.

Document how we satisfied ourselves regarding the reliability of the underlying data used,
including IPE, used in the tests of details.

Evaluate the adequacy of other adjustments to contract liabilities and evaluate

completeness (e.g., review contract databases, backlog listing or other source
documentation outside of the general ledger to identify any advance payments received by
the entity prior to its performance under the contract). Review the detail and obtain an
understanding for any unusual items (e.g., they are unusual based on our understanding of
PUA-04-GL: Evaluate other the entity and the relevant SCOTs, there is a higher risk of material misstatement in the
BS: E, C account due to the CRA or a history of misstatement). Determine whether further testing
adjustments to contract liabilities
(e.g., inspection of source documentation) is necessary.

Consider the results of our revenue cutoff testing and determine if additional testing is
necessary on the classification of liabilities related to revenue.
Document how we satisfied ourselves regarding the reliability of the underlying data used.

When we perform substantive procedures at an interim date, perform the following

rollforward procedures to an extent that provide a reasonable basis for extending our audit
conclusions at the date of our interim procedures to the balance sheet date:

Perform inquiries of appropriate personnel to confirm our understanding of any changes in

the rollforward period.

PUA-05: Perform rollforward

BS: E, C Confirm that there have been no significant changes during the rollforward period in the
procedures
control environment, and in controls relevant to the significant account (if applicable).

Update our lead sheets to compare the account balances at the balance sheet date with the
interim date. When we identify an unusual or unexpected change or the lack of an expected
change, we obtain an understanding of the reasons for the change and determine whether
further testing is necessary.

21
Title Assertions Primary substantive procedure Real estate sector considerations

Perform rollforward analytical procedures and/or tests of details for transactions in the
rollforward period.

22
PART II. E – CUSTOMER’S DEPOSIT/RESERVATION DEPOSITS

Title Assertions Other Substantive Procedure Real estate sector considerations

NE-01-GL: BS: E, C NE-01A - Test of details
Test the 1. Obtain the schedule of customer’s deposits.
validity of 2. Select the samples that will be subjected to verification of validity considering the guidance provided in “SAMPLE:
customer's 4 Sampling for tests of details”.
deposits 3. For each sample, compare the collection to date and total contract price. Ensure both collection and contract price
are VAT exclusive. Vouch current year collections as additional procedure to support the schedule provided by
(OSP) management.
4. For collections exceeding the revenue recognition threshold, inquire with management on the reason why these are
still recorded under customer’s deposit.
5. Relate the results of audit of bank reconciliation statements to the test of details procedures.
6. Relate the results of audit of revenue recognition for those arrangement which has not met all criteria of a contract.
NE-01B - Test of long outstanding customer’s deposits
1. Obtain the schedule of customer’s deposits.
2. Investigate long outstanding customer’s deposits.

NE-01C - Test of duplicate bookings

1. Obtain the schedule of customer’s deposits.
2. Check whether the contracts in the schedule of customer's deposits are also included in the subsidiary ledger of
accounts receivable in E-01.
Inquire with management if there are contracts appearing in both the schedule of customer's deposits and accounts
receivable.

23
PART II.F – COST TO OBTAIN A CONTRACT

Title Assertions Primary substantive procedure Real estate sector considerations

A. Reconcile subledger with general ledger/ obtain and compare balances

1. Obtain from the entity the costs to obtain or fulfill a contract (contract cost asset; e.g.,
commissions) subledger and a reconciliation of the subledger to the general ledger as of
the period end date. Trace the balances from the reconciliation to the subledger and the
general ledger / our lead sheet.
2. Determine an appropriate testing threshold (____% of TE). For all reconciling items
JUA-01-GL: Reconcile subledger greater than the threshold, examine supporting documentation to determine their validity.
with general ledger/ obtain and BS: E, C Identify items that meet qualitative criteria that indicate that they are more likely to contain
compare balances material misstatements (e.g., they are unusual based on our understanding of the entity
and the relevant SCOTs, have a higher risk of material misstatement or a history of
misstatement). Document the basis for this determination and examine supporting
documentation to determine their validity.
3. Compare the contract cost asset balances as of period end with that at the prior
period end. When we identify an unusual or unexpected change or the lack of an expected
change, obtain an understanding of the reasons for the change, document the basis for this
determination and determine the effect on our planned substantive procedures.

B. Perform substantive analytical procedures

1. Determine whether to perform substantive analytical procedures to verify existence and

valuation. When we decide to do so, determine our expectation of the balance of
contract cost assets or changes in the account that is sufficiently precise to identify a
JUA-02-GL: Perform substantive misstatement. The expectation needs to be quantifiable and its basis readily
BS: E, V, C
analytical procedures identifiable and supportable.
2. Considering our expectations and identified level of precision, determine our variance
threshold (the amount of difference between the recorded amount of contract assets
and our expectation that is acceptable without further investigation).
3. Investigate the variances from our expectations, taking into consideration our variance
threshold. Obtain sufficient evidence that the variances are appropriate.

24
 Title Assertions Primary substantive procedure Real estate sector considerations
C. Test of details

When the evidence obtained from the substantive analytical procedures is insufficient to
conclude upon the account balance, perform tests of details. Perform procedures to verify
the existence and valuation of contract cost assets and determine whether they are
recorded in accordance with the entity’s accounting policies and the applicable financial
reporting framework (e.g., PFRS 15).

1. Evaluate whether:
a. Costs capitalized are included in the cost guidance in accordance with the
applicable financial reporting framework
b. The entity has appropriately recognized a contract cost asset for costs
incurred related to obtaining or fulfilling a contract
c. For costs to obtain, the entity appropriately capitalized the costs by
understanding the nature of the compensation plan (or other applicable
source of cost to obtain) and determined the costs capitalized were
incremental to obtaining the contract and expected to be recorded by the
entity
JUA-03-GL: Perform tests of BS: E, V, P&D,
d. For costs to fulfill, the entity appropriately capitalized the costs by
details R&O
evaluating whether they were (1) directly related to the contract or
anticipated contract that the entity can specifically identify, (2) the costs
generated or enhanced the resources of the entity that will be used in
satisfying performance obligations in the future and (3) the costs are
expected to be recovered
e. The contract cost asset is appropriately classified on the balance sheet
2. Evaluate the results of our test of details to determine whether the evidence
obtained has provided a reasonable basis for a conclusion about the population
tested.

Note:
For key items, record any misstatements on our summary of audit differences as factual
misstatements.

For the representative sample, when we have determined that identified misstatements are
representative of the population, project the known representative misstatements to the
entire population. Record the projected representative misstatement on our summary of
audit differences.

25
 Title Assertions Primary substantive procedure Real estate sector considerations

D. Test for amortization of contract cost assets

1. Test amortization expense in a manner responsive to our combined risk

assessment with reference to the entity’s accounting policy and applicable
financial reporting framework.
2. When tests of details are performed, perform procedures to determine whether:
 The amount of expense recorded for the period is appropriate and the
contract cost asset is being amortized on a systematic basis that is
JUA-04-GL: Test amortization of BS: V consistent with the transfer of the goods or services to the customer
contract cost assets IS: O, M, P&D to which the asset relates
 The method of amortization is appropriate
 The calculation is clerically accurate
 The financial statement line item to which the amortization expense is
being recorded is appropriate and in accordance with the entity’s
accounting policy and applicable financial reporting framework
 Changes in estimation methodologies (e.g., periods of time) (if
applicable) are appropriate

E. Test for impairment of contract cost assets

1. Determine whether the entity has appropriately assessed the unamortized

contract cost assets for impairment and verify that the appropriate adjustments
are made in accordance with the entity's accounting policies and the applicable
financial reporting framework (e.g., PFRS 15).

2. Consider evidence obtained from the performance of other audit procedures

which may indicate potential impairment (e.g., results of analytical review
JUA-054-GL: Test for impairment BS: E, V, P&D procedures, review of meeting minutes and key contracts), including evidence
Test amortization of contract cost that may contradict management’s assertions.
assets
Please note that unamortized contract asset should be impaired if the related
sales is cancelled unless management has an explanation of non-impairment.
This will be included in the gain/loss from sales cancellation.

3. When an impairment loss has been recorded, perform procedures to test the
amount and the timing of the impairment recorded. Evaluate whether the
impairment calculation and the underlying data is sufficiently reliable for our
purpose (i.e., identify and test IPE). Document our evaluation of relevant and
reliable information that may contradict management’s estimate and assertions.

26
 Title Assertions Primary substantive procedure Real estate sector considerations
F. Perform rollforward procedures

When we perform substantive procedures at an interim date, perform the following

rollforward procedures to an extent that provide a reasonable basis for extending our audit
conclusions at the date of our interim procedures to the balance sheet date:

1. Perform inquiries of appropriate personnel to confirm our understanding of any

JUA-06-GL: Perform rollforward
changes in the rollforward period.
procedures
2. Confirm that there have been no significant changes during the rollforward
BS: E, V, C period in the control environment, and in controls relevant to the significant
account (if applicable).
3. Update our lead sheets to compare the account balances at the balance sheet
date with the interim date. When we identify an unusual or unexpected change or
the lack of an expected change, obtain an understanding of the reasons for the
change and determine whether further testing is necessary.
4. Based on the results of procedures 2 and 3, team to assess whether it is
necessary to perform rollforward analytical procedures and/or tests of details for
transactions in the rollforward period.

G. Test of other adjustments

JUA-07-GL: Evaluate other 1. Evaluate the adequacy of other adjustments to contract cost assets. Review the
adjustments to contract cost BS: E, C detail and obtain an understanding for any unusual items (e.g., they are unusual
assets based on our understanding of the entity and the relevant SCOTs there is a higher
risk of material misstatement in the account due to the CRA or a history of
misstatement).

27
Part II.G – Other PSPs/OSPs for the REAL ESTATE sector

Revenue

Title Assertions Other Substantive Procedure Real estate sector considerations

UA-09-GL: IS: O
Conduct site
visits Using the same samples selected for UA-04 (procedure 2 for all contracts with recognized revenue), conduct site visits.
Take pictures to document the project’s actual status. Compare percentage of completion against status of
(OSP) construction during site visits for obvious significant inconsistencies. Refer to procedures on Inventory and Cost of
Sales for the relevant questions to ask during site visits and other important considerations.

Document the basis of samples selected and the results of the procedures performed.

28
Appendix: Available resources for PFRS 15 implementation
• Revenue recognition (IFRS 15) Audit FAQs
• Applying IFRS: A closer look at the new revenue recognition standard
• Auditing the adoption of IFRS 15 Revenue from Contracts with Customers
• Revenue recognition scoping questionnaire
• IFRS 15 Illustrative risk and control matrix
• Guide to auditing IFRS 15 Revenue from Contracts with Customers
• Excel-based IFRS Contract Analysis Enabler

29