Ra bills
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 January 2014
WHAT IS MEAN BY RA BILLS IN CONSTRUCTION ACCOUNT AND HOW IT IS ACCOUNTED IN BOOKS...??
06 January 2014
R A Bills is nothing but Running Account Bills
Normally in case of project invvoicing pattern is fixed by a contract wherein (in most cases) there is advance payment for site mobilisation. and then there are several running account bills based on progress completion (also known as progress billing) This RA billing is either on physical completion (actual measurement) or some event.
Normally advance payment is deducted prorata from progress billing (which together can be taken as revenue subject to meeting of other criteria such as AS-7 )
Again from each billing there can be a clause for retntion (for defect liability period) Retention amount can be taken as revenue only when it is certain (either defect liability period is over OR contractee waives retention right OR Retention guarantee is provided by contractor)
You must try to make budget for each project and ensure compliance with AS-7
I hope, I have tried to explain clearly to the xtent possible
Regards
Normally in case of project invvoicing pattern is fixed by a contract wherein (in most cases) there is advance payment for site mobilisation. and then there are several running account bills based on progress completion (also known as progress billing) This RA billing is either on physical completion (actual measurement) or some event.
Normally advance payment is deducted prorata from progress billing (which together can be taken as revenue subject to meeting of other criteria such as AS-7 )
Again from each billing there can be a clause for retntion (for defect liability period) Retention amount can be taken as revenue only when it is certain (either defect liability period is over OR contractee waives retention right OR Retention guarantee is provided by contractor)
You must try to make budget for each project and ensure compliance with AS-7
I hope, I have tried to explain clearly to the xtent possible
Regards
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 January 2014
OK SIR THANKS I GOT THAT CONCEPT...BUT CAN U PLEASE ELABORATE WITH AN EXAMPLE SIR..??
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