Contract accounting - very interesting topic !!

Hello Everyone ,

One of my Client is Surveyor for Electric & Grid line .They provide drawing and planning to various big big companies for streching the electric line across many kilometeres as per their survey.

They get orders from various power based companies like PowerGrid etc. Many project/orders can continue for few years like 3 years or so and many get completed in the same year itself .So some contract is in WiP stage at the year end.So what should be the approach for accounting in this case.How the revenue to be valued , how related expense to be valued and how WiP of a contract to be dealt in this case and to be shown.

Guys & Gals , lets discuss this topic it is very relevant and interesting topic .

 

Thanks 

Replies (1)

Hi Baid

The same to be accounted as per AS 11.  The profit to be recognised on presumptive method.  The WIP grouped under inventory.  The direct expenditure directly debited to WIP.

The indirect expenses proportionate share directly debited to WIP and remaining share  to P&L A/c.

 

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