23 July 2009
I want to know which Accounting Standard is applicable for recognising revenue in case of a Civil Contractor - AS 7 Construction Contracts, or AS 9 Revenue Recognition.
The individual is engaged in pure civil contract works, which includes, Painting, renovation, Repairing etc of Buildings, Flats, etc, and specifically does not include Construction, or Redevelopment projects.
Para 8.3 of AS7 mentions that "Contracts for rendering of services which are directly related to the construction of assets" are to be classified as Construction.
The question that arises here, is that whether a Civil Contractor can be covered under AS7 on the basis of the above-mentioned grounds or not.
23 July 2009
When you read the definition of construction contract in AS 7; it means the contract for the construction of an asset or assets.... When the contract specifically excludes construction of assets, it will not be covered by AS 7 as AS 7 itself concentrate on construction contract and also it excludes as per definition itself AS 9 will be applicable in my openion
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