As-7 construction contract
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 September 2016
Experts,
If a construction contract is undertaken by A Ltd and it outsources the entire contract to B Ltd. The Payment received for the contract is received by A Ltd which it remits to B Ltd. after deduction of fixed percentage of commission.
My question is whether A Ltd. is required to show WIP in its books of accounts? WIP is already shown by B Ltd. As A Ltd is the main contractor of a party so whether he is also required to disclose any WIP of B Ltd. in its books of accounts.?
If a construction contract is undertaken by A Ltd and it outsources the entire contract to B Ltd. The Payment received for the contract is received by A Ltd which it remits to B Ltd. after deduction of fixed percentage of commission.
My question is whether A Ltd. is required to show WIP in its books of accounts? WIP is already shown by B Ltd. As A Ltd is the main contractor of a party so whether he is also required to disclose any WIP of B Ltd. in its books of accounts.?
Amol S Joglekar
(Expert)
09 September 2016
what is outsourced is the work.....the contract still belongs to A. The crucial point is who is the owner of stock.....whether of raw material or WIP
If the WIP is owned by B, then it will be shown by B alone.
If it is owned by A, then it will be shown by A alone.
The same WIP can not be owned by BOTH
If the WIP is owned by B, then it will be shown by B alone.
If it is owned by A, then it will be shown by A alone.
The same WIP can not be owned by BOTH
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