purchase of plotin case of builder & developers

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RANJEET (Querist)
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07 August 2010 i have purchase a plot rs. 6cr. as on jan 2010 construction on such plot strated from march 2010

can it necessary to shown plot on profit & loss a/c and claim full expenses as on 31stmarch 2010.also showimg wip

otherwise shown as the part of current assets & transfer to profit & loss a/c when project completed and occupency certificate received

please clarify both the method are as per accounting principle

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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09 August 2010 In your case AS 7 (Accounting for Construction business) shall be applicable. In this case land shall not be shown in P & L A/c until and unless sales are shown.