Construction of 2 floor

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 January 2012 when 2 nd floor is constucted on sanctioned & purchased FIS,which point are to be kept in mind while doing auditig & INCOME TAX?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 January 2012 Generally , the methodology adopted earlier when Ist Floor was constructed has to be followed consistently.
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It seems from your query that, Ist Floor was complete and your Organisation has purchased rights to construct 2nd floor.
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You have to see whether the cost of project has been properly recorded or not. Have an Idea about the estimates of Project Cost and Project Revenue.
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Eventhough AS-7 applies for contractors, yet it is advisable to study AS-7.
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For Revenue recognition, you have to see AS-9. You may verify the basis of recognition of sale has consistently been followed, in all units, in case the activity involves multiple units.
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