When a sale of flat is completed i.e risk and reward are transferred-
i) on the date of purchase agreement,
ii) on the date of registration of agreement, or
iii) on the date of possession of flat.
please provide your view
CA Tripti
(CA Practice )
(29 Points)
Replied 16 September 2013
As per AS 9, revenue is to be recognised in the books of accounts when significant risk ans reward related to the asset has been transferred to the buyer. In case of sale of flat when sale agreement has been entered all risk and rewards has been transferred to the new owner. Hence that date can be taken as date of sale and revenue can be recognised.
However many people consider date of mutation as date of effective sale as on that name of owner is changed in mutation records. Hence on a conservative approach, date of mutation can be considered as date of sale and revenue recognition.
Naveen
(Student)
(37 Points)
Replied 16 September 2013
ok
but if the flat is under construction i.e flat purchased from builder itself then too date of possession plays no role or one can say that risk are transfered only on possession??
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
