25 June 2015
A Contractee has paid Advance to contractor for building residential complex. But bill is not raised by the contractor. Now my question is how to recognize construction charges in the books of contractee ? whether it would be recorded as an when the bill is raised by contractor or on proportionate completion basis as per AS 7 ? Also how to recognize it for Income tax Purpose ?
30 June 2015
UNLESS THE WORK COMPLETED YOU CANNOT AVAIL DEPRECIATION. HOWEVER, FOR ACCOUNTING PURPOSE THE SAME AMOUNT AS PER AS-7 CAN BE RECOGNISED BY DEBITING CAPITAL WORK IN PROGRESS AND CREDITING THE CONTRACTOR.
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