AS-7 or AS-2

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Raghav Bhatia (Querist)
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12 March 2009 Please tell that if an assesse is into a business of constructing house and then selling it, then for the purpose of valuation of WIP of house, would AS-7 be applied or AS-2? If you say AS-7 will be applied, then remember that it requires an agreement on the basis of which you will calculate % of completion of work, which is not available, bcoz first the assessee makes the house then sell it. If you say that AS-2 will be applied then remember that AS-2 specifically excludes valuation of contruction of buildings/houses.

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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13 March 2009 AS - 7 will be applied. valuation will be done on the basis of work certified. no agreement is required.

Raghav Bhatia

Raghav Bhatia (Querist)
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14 March 2009 Hi Devanshi thanks for your reply. Your justification seems to be correct but DLF is not valuing its WIP under AS-7 rather they are applying AS-2. So plz reconsider and reply.

you may leave reply at bhatiaraghav@yahoo.com if possible. Thanks in advance.

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Raghav Bhatia

Raghav Bhatia (Querist)
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14 March 2009 1