Construction Account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2010 Hi
Repested Member

Can any one tell me?

I am filing return of construction business of a party in my office.

In profit and loss account they disclosed 1 crore exp. in constrution site during the previous year.

And none income is recognised and such 1 crore exp. is net loss.

So what to do for recognised income, because according to matching concept this is not right and what method to apply for recognised income.

And construction is still continue.

And also capital a/c showing negative balance i.e. repayment of capital by bank account.

Thanks in
advance sir/madam

mohinder kansal

mohinder kansal (Expert)
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28 July 2010 IF EXPENSES ARE RELATED TO CONSTRUCTION WORK EXECUTED, WORK DONE SHOULD BE MEASURED AND DEPENDING ON THE METHOD OF ACCOUNTING ADOPTED THAT MAY BE SHOWN AS WIP. AND IF EXPENSES ARE RELATED TO THE PURCHASE OF MATERIALS ETC. AND NO WORK OF CONSTRUCTION IS DONE, STOCK IN HAND MAY BE SHOWN.