UITF Abstract 40 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:

• icaew.com/newukgaap

Synopsis

The consensus applies to all contracts for services:

• Where there are distinguishable phases of a single contract it may be appropriate to account for the contract as two or more separate transactions.
• Contracts for services should be accounted for as long-term contracts, where contract activity falls into different accounting periods, unless they involve the provision of a single service. 
• Where the substance of the contract is that it is performed gradually over time revenue should be recognised as contract activity progresses.
• Where the substance of the contract is that the right to consideration does not arise until the occurrence of a critical event revenue is not recognised until that event occurs.

• Read UITF Abstract 40 (PDF 20KB/6 pages) 

Last updated 21 June 2015