As7 computation and disclosure

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2013 Please provide solution for the below issue.

contract value :100
estimated total cost :90
costs incurred upto the end of the period:45
cost to complete :45
Advance received from client:10
Progress billings :30

Unbilled Revenue:?
how disclosure in financials as per AS7 with regard to amount due to client and amount due from client.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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29 June 2013 Percentage of completion 50% = 45/90X100= 50%

So revenue need to be recognized Rs.100x50% = Rs.50

Progress billing Rs.30 so unbilled revenue Rs.20

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2013 Thank u. What about advance received. How disclosure should be assuming no other project is executed.
Amount due from client

Amount due to client?

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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01 July 2013 Generally Actual bill value and amount received from client of can be adjusted and shown

Unbilled revenue can be shown under revenues and Unbilled Debtors under loans & advances

Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2013 Thank you once again, are you saying this.

PL:
Income from ops : 50
(the above figure includeds unblilled revenue of 10)

BS: (Assets)
Inventory :
Unbilled Revenue : 10

As7 disclosure:
Revenue Recognised :50
Amount due from client :10
Amount due to client : Nil

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 July 2013 P&L

Income from ops :40
Unbilled revenue:10
Total 50

B/S
Under loans and advances
Unbilled revenue(Debtors) Rs.10

Under trade receivable
Debtors Rs.30
Less: amount received Rs.10
Balance Rs.20