Improving the methodology for calculating and accounting for the escrow effect by developers based on the requirements of IFRS

Abstract

This study is devoted to the consideration of the methodology for accounting for the effect of using escrow accounts in the developer’s reporting based on the requirements of IFRS in settlements with shareholders. Over the past few years, the housing construction sector has grown significantly: there has been an increase in the number of construction organizations, an increase in the number of commissioned areas of construction facilities. At the same time, according to the data https://наш.дом.рф There are still problematic unfinished residential complexes, for which shareholders lost money when investing in the construction of facilities. In order to increase the level of safety of shareholders’ funds from the occurrence of various risks during the construction process and loss of funds, settlements between the developer and the shareholder under equity participation agreements using escrow accounts were introduced. For some time, developers of already launched housing construction projects still used settlements with shareholders that do not involve the use of escrow accounts, but over time and the launch of new housing construction projects, this legal requirement is already strictly fulfilled. Therefore, the issues of accounting methodology for settlements using escrow accounts are becoming more important and relevant.
The purpose of this article is the author's interpretation of the methodology for accounting for the effect of using escrow accounts in settlements between the developer and shareholders in the developer's management reports prepared on the basis of IFRS requirements, as well as identifying problem areas during the formation and subsequent application of this methodology. Based on the results of the study (using various methods of analysis and comparison of available information), the authors propose a unified approach to interpreting the methodology for accounting for the escrow effect to be reflected in management reporting based on IFRS requirements, which will positively affect the unification of the methodology of developers, reducing risks in the preparation of management reporting.