Accounting of income in real estate sector
This query is : Resolved
CA Shishir
(Querist)
19 April 2008
Hi!!
can anyone explain how income is recognised in case of developers (whose main activities is selling of flats / apartments). that is when the project takes more than a year to complete. the developers would have collected money in advance from the customers
AS 7 would not apply to the developers since they do not engage in the construction activities
AS 9 applicable for sale of goods and the services (and technical services).
in this situation how the revenue is recognised year on year
can anyone explain how income is recognised in case of developers (whose main activities is selling of flats / apartments). that is when the project takes more than a year to complete. the developers would have collected money in advance from the customers
AS 7 would not apply to the developers since they do not engage in the construction activities
AS 9 applicable for sale of goods and the services (and technical services).
in this situation how the revenue is recognised year on year
CA. Kirti S. Ganatra
(Expert)
19 April 2008
Refer AS - 2 Inventory. For real estate developer. Flat is not a fixed asset it is inventory. and also refer revenue recongnition accounting standards
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