Abstract:

Construction contracts are reflected to financial reports differently in Turkish Tax Legislation, Turkish Accounting Standards (TAS) and United States Generally Accepted Accounting Principles (US GAAP). Accounting and reporting construction contracts are made in accordance with completed contract method according to Revenue Tax Code (RTC) and General Communiqué on Accounting System (GCAS). Considering the completion rate of work, TAS, however, aims to provide more accurate knowledge about businesses to financial report users regarding revenues and costs of construction contracts. US GAAP applies cost recovery method when there are important uncertainties about obtaining remittances. This study compares these aforementioned methods regarding the presentation of construction contracts in financial reports within the context of a business sample whose stocks are traded in Istanbul Stock Exchange.

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