Triparty agreement

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A construction business has sold a flat to Party A, who has paid in full. Party A now wishes to sell this flat to Party B, with the final sale agreement being between the builder and Party B. The company is seeking advice on whether to use a triparty agreement where Party A is a confirming party, and how to handle the accounting entries for this transaction.

Pramila S. Karbele

Pramila S. Karbele (Querist)
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08 July 2020 we are in construction business. allotted 1 flat to a party A. he paid us total sale price. now he selling the same flat to mr. B. Here final sale agreement will be between builder & mr. B.
1. Can we to triparty agreement stating mr. A as confirming party ?
2. what is the accounting treatement in books of accounts?
please guide.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 July 2020 1 Have tripartiate agreement and then excute sale deed with B.
2 consider B in the books of accounts by passing journal entry debiting A and crediting B for the payment received.

Pramila S. Karbele

Pramila S. Karbele (Querist)
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18 August 2020 very useful thank you so much

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