Capitalisation of expenses to wip
This query is : Resolved
06 June 2012
Sir,
We are a builder developing a group housing project.
Plz tell us the accounting of expenses for example advertising expenses etc incurred for the purpose of developing of flats for subsequent sale.
Can we transfer such expenses to WIP account (Project Cost account) and what shall be the head of such account?
We are a builder developing a group housing project.
Plz tell us the accounting of expenses for example advertising expenses etc incurred for the purpose of developing of flats for subsequent sale.
Can we transfer such expenses to WIP account (Project Cost account) and what shall be the head of such account?
06 June 2012
this is debatable as the advertising is not compulsory for developing the flats . You can only capitalise (WIP of stock as you are doing that business) the expenses which are compulsory and part of the development of that project .
Advertisement expense can be treated as pre-operative expenses before you start the business and start selling project
Advertisement expense can be treated as pre-operative expenses before you start the business and start selling project
06 June 2012
Thanks Dubey Ji,
extending my query, usually flats are booked provisionally before construction starts and during construction.
And advertisement is also done regularly for the purpose of sale of units in the project.
What is the best solution?
extending my query, usually flats are booked provisionally before construction starts and during construction.
And advertisement is also done regularly for the purpose of sale of units in the project.
What is the best solution?
06 June 2012
Goyal ji, That booking can be treated as advance from customer and income can be recognised on %age of completion of project basis.
evrything depends upon the progress of the project
evrything depends upon the progress of the project
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
Trending Online Classes
CAclubindia
