AS-7

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

18 December 2009 Para 35 AS-7, When it is probable that total contract costs will exceed total contract revenue, the expected loss should be recognised as an expense immediately.

In a Case where contract till not started, what entry to be passed to recongnise exp in pl? should we create a corrosponding provision in b/s?

In a case where contract cost of such part of contract which is pending to incurr is expected to exceed revenues, what entry to be passed for same purposes?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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20 December 2009 As per Accouting Standard 7 we need to create the provision for expected loss whether the work commenced or not

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Querist : Anonymous

Querist : Anonymous (Querist)

23 December 2009 ok.... but before revision it status.. we have to create provision for expected loss..... but in revised AS it stats loss should be recongnised as an expens immediately... how can we charge such loss to P&L without creating a provision..???

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