AASB 111 - Construction Contracts - July 2004
Non‑commercial ContractsNon‑commercial Contracts
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Non‑commercial Contracts
G1 For not-for-profit entities that are construction contractors, the requirements of AASB 111 Construction Contracts should also be applied to non‑commercial construction contracts and similar arrangements that are binding on the parties to the arrangement but which do not take the form of a documented contract.
G2 A non‑commercial contract or similar arrangement may be either a “fixed price contract” or a “cost plus contract” (which in a non‑commercial context may also be referred to as a “cost based contract”). Contracts and arrangements classified as fixed price contracts may involve the funding of construction activity through indirect means such as through a general appropriation or other allocation of government funds or by general purpose grants. In contrast, contracts and arrangements classified as cost plus (or cost based) contracts may involve full or partial reimbursement of the costs incurred for the construction of the asset from the recipient of the constructed asset and/or from other parties.