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Classification of the Equatioan Construction Sector
In Ecuador, the construction sector can be divided into three:
- Building and work: main activity lies in the construction of housing and other real estate, offices, schools, factories, etc. This construction subsector was affected by the regulation issued by the Superintendence of Companies seeking to eliminate fraud in the purchase of homes.
- Public Works: Construction in general such as: roads, urban roads, sewerage works, bridges, etc. This subsector was very dynamic in 2014, and it is expected to have the same trend this year.
- Reform and rehabilitation: reforms and/or rehabilitation of real estate or constructions already prepared, which, due to the passage of time and other factors, need repair.
For the application of the standard, the following considerations must be taken:
- It establishes a hierarchy for the choice of accounting policies, establishing as the first point the rules and interpretations of the IASB, then if there is no direct IFRS, the requirements and guidelines of the IFRS that refer to similar and related issues;And finally the management can also take into account the most recent pronouncements of other regulatory agencies.
- Accounting policies must be applied according to uniformity criteria for similar operations.
- Only changes in accounting policy should be made if required by any IFRS or if they result in more relevant and reliable information.
Establish the accounting treatment and the revelation of financial information regarding
Employee benefits, including:
- Short -term remuneration such as salaries, annual vacations, remunerated permits, participation in annual gains, incentives and non -monetary remuneration;
- Other long -term benefits such as paid permits after long periods of service, disability, deferred compensation and participation in long -term profits and incentives
- Pensions, life insurance and post-employment medical assistance and compensation for dismissal (Cedeño Moreira, 2017)
Establish the principles for initial recognition and subsequent assessment of properties, plant and equipment.
It contains the accounting treatment for real estate, machinery and equipment, the accounting, the moment in which it should be recognized, the determination of the books in books and the charges for depreciation.
The guidelines of IAS 36 apply mainly to:
- Goodwill or Mercantile Credit
- Intangible assets
- PROPERTY, PLANT AND EQUIPMENT
IAS 36 is applicable to all assets except:
- Stocks (IAS 2 Stocks),
- Assets arising from construction contracts, c) Deferred tax assets (IAS 12 Profit Tax),
- Assets related to compensation to employees
It is necessary to mention that the construction sector represents a set of entities that serve as strategic tools for impulse and progress of work places and economic increase in the country.
On the other hand, all aspects present in the Ecuadorian construction sector directly or indirectly affect the general population either through the socioeconomic impact or outcome of the same.
The transformation and possibility of making favoring changes for the citizens of a country specifically falls on the opportunity to emerge, the construction sector being one of the main ones and therefore priority opportunities of Ecuadorians.
It can be said then that it is fundamental, the presence of this sector because its influence depends on the development of the objectives of not only maintainemployment allowing stability and evolution to the general population.