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
- Supply through E-commerce Operators
- STCG....................................................
- TAN for Partnership
- Sales return eway bill
- Relief u/s Section 89
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- REGARDING GST LIABILITY/....
- LTCG for Assmt year 26-27
- STCG FOR GOLD ETFs
- SALE BILL AGAINST GOODS RETURN
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- Nomination of Bank for refund in itr 2
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
