8 Replies
@rinssss
(ca)
(119 Points)
Replied 06 September 2011
Well when Co. is dealing with Residential Complex/flats then in this case sale of complex will be recognised as sale for the co. and not the assets.
Wel Sudanshu your question is quiet vague.plz do clear it wat u wanna ask!
SUDHANSHU
(ARTICLE)
(99 Points)
Replied 06 September 2011
@ rinssss... see a company is a builder company who construct residential complex. he sell his 2/3rd flat in advance but possession is not given yet... den how i recognise revenue in p&l a/c of that co. there are not actual sale made.. the book showing only advance received against flat
valji
(Accounts manager-MBA)
(2150 Points)
Replied 06 September 2011
when the agreement of sale is made is shown as revenue for sale of flat whether possession given or not ,whether or not full amt of money is received .
Keval
(Consultant)
(120 Points)
Replied 06 September 2011
Revenue will be recognized on percentage completion basis or full amount of sale consideration in agreement ??
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 07 September 2011
Revenue is recognised when transfer of ownership is substantially complete and the seller can claim subsequent gain on transfer of ownership and there is not uncertainity in collection of amount from realestate Sales. The advance booking amount and part payment received would be defferred revenue and cannot be recognized unless and until the above conditions are met.
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 07 September 2011
Dear All,
I have done some further research on the above subject and found it something interesting for all...
https://icai.org/resource_file/100751764-1774.pdf
Bhaskar
Keval
(Consultant)
(120 Points)
Replied 07 September 2011
Bhaskar, I have gone through the guidance note but in para 8 its specifies that if the seller has meet all the condition as mentioned as above but still seller has some substantial act to perform after the transfer of risk and reward of owner ship revnue should be recognised on proportionate basis i.e. percentage completion method as prescribed in AS-7. Hence i think it could be applicable. Pls let me know if the understanding is correct or not.
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 07 September 2011
Dear Keval, you are right as far as:
1) Title of ownership has been transffered to buyer
2) Seller is obliged to complete construction before specified period and
3) No uncertainity in collection from buyer.
Regards,
Bhaskar
Recent Topics
- Nznxnc call me at the end of the day of the
- Cp chod doob zoom vo book book
- Nsje snswk fjw ed le ene djff ne enje ejdd rejje
- Hxjcif the day I have been in touch with me and
- Iska djd djrbdsjebshe sir ur rei ejr reinr the jr
- GST registration for medical shop in Karnataka
- Hsshs me know if you are free number of the
- Chu Kang and the situation of the situation and I
- How to reverse wrong transaction payment in phonep
- Paytm wrong transaction
Related Threads
CAclubindia
