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Head of exps.

Sulabha (Accounts Assistant) (67 Points)

30 July 2016

Some painting work done at site comes under which head

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9 Replies

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 30 July 2016

Are you working with a construction company?

Sulabha (Accounts Assistant) (67 Points)
Replied 30 July 2016

No I am working with Solar Company.

Installation done at site

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 30 July 2016

So your company installs solar systems to your clients. And is this painting expenses relates to a contract which you are currently doing?

Sulabha (Accounts Assistant) (67 Points)
Replied 30 July 2016

Yes right sir

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 30 July 2016

I don't know how your accounting patern really is. Accounting is done as per the requirement of reports you need. Lemme ask some more question. Do you need to know the profit of each contract ?

Sulabha (Accounts Assistant) (67 Points)
Replied 30 July 2016

No it will be recorded under site expenses . no we dont want to know the profit for each contract

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 30 July 2016

Then the next point to be considered is materiality and occurance of the expense. If it occupies a major expenses of the contract my opinion is that it can be accounted as painting expenses itself. But when we are reading financials it may not be clear and can lead to confusion. So what you need to do is to add something between painting like solar like panel painting expenses or something like that. You have not mentioned where does the paint apply.