classification of retention money
This query is : Resolved
13 July 2010
If in a contract it is mentioned that some percent (say 10%) of total contract amt will be payable after the final acceptance of contract and the deduction is made by the customer in all the bills for said 10%, then where will the amount retained be classified by the supplier? Will it be classified under Debtors or under loans and advances recoverable in cash or kind?
13 July 2010
It will be under Debtors only.
13 July 2010
AGREED
13 July 2010
Thanks sir. But as per schedule vi of companies act, 1956 only those which have become due are classified as debtors/ receivables. when in contract itself it is mentioned that the payment of the retention money will be made only after the completion/ final acceptance then it has not become due.It gets due only at the completion. It has only accured. Now will it be classified as Debtors?
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