Revenue recognition for real estate installment sales and its impact on accounting treatments according to international standards

an applied study in the Diwaniyah Municipality Directorate

Abstract

The research aims to measure the income generated on the basis of installment sales for sales whose payment extends over more than one period of time and to record the accounting treatments necessary to recognize installment sales, according to "generally accepted and accepted accounting principles" and international accounting standards. In order to achieve the research objective, the Diwaniyah Municipality Directorate was selected to implement the research, and the data obtained by the researcher from the Diwaniyah Municipality Directorate related to land sales in installments for the years (2019-2022) were relied upon, and the reality of installment sales in the research sample was studied and how to record the accounting entries related to them. The researcher reached a set of conclusions and recommendations, and among the most prominent conclusions reached is that the unified accounting system for municipalities approved by the Diwaniyah Municipality Directorate did not take into account installment sales operations that the directorate adopts in land sales operations, in addition to the failure of the Diwaniyah Municipality Directorate to record the remaining amounts of land sales revenue that were paid in installments over three years as receivables. (Private sector debtors), and not showing them in the financial statements and accounting records, which led to the lack of honesty and fairness in presenting the financial statements of the directorate. One of the most important recommendations reached by the research is the necessity of updating the unified accounting system for municipalities and introducing the accounting restrictions proposed by the researchers.