As7 computation and disclosure

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Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2013 Please provide solution for the below issue.

contract value :100
estimated total cost :90
costs incurred upto the end of the period:45
cost to complete :45
Advance received from client:10
Progress billings :30

Unbilled Revenue:?
how disclosure in financials as per AS7 with regard to amount due to client and amount due from client.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

29 June 2013 Percentage of completion 50% = 45/90X100= 50%

So revenue need to be recognized Rs.100x50% = Rs.50

Progress billing Rs.30 so unbilled revenue Rs.20

Querist : Anonymous

Querist : Anonymous (Querist)

01 July 2013 Thank u. What about advance received. How disclosure should be assuming no other project is executed.
Amount due from client

Amount due to client?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

01 July 2013 Generally Actual bill value and amount received from client of can be adjusted and shown

Unbilled revenue can be shown under revenues and Unbilled Debtors under loans & advances

Querist : Anonymous

Querist : Anonymous (Querist)

02 July 2013 Thank you once again, are you saying this.

PL:
Income from ops : 50
(the above figure includeds unblilled revenue of 10)

BS: (Assets)
Inventory :
Unbilled Revenue : 10

As7 disclosure:
Revenue Recognised :50
Amount due from client :10
Amount due to client : Nil

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

02 July 2013 P&L

Income from ops :40
Unbilled revenue:10
Total 50

B/S
Under loans and advances
Unbilled revenue(Debtors) Rs.10

Under trade receivable
Debtors Rs.30
Less: amount received Rs.10
Balance Rs.20

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