Way of Accounting for Toll Gate user fee collection

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This query is : Resolved

sivanagesh (Querist)

04 June 2011 hai,

we are construction company, we have taken a project from NHAI to collect User fee.
a) our contract is to purely for collection
of user fee only.
b) Irrespective of Collection, we have to pay
to NHAI per week a fixed amount for a period of one year.

Q.1) we are not aware how to acccount these transaction..
Q.2) How to recognise the income ?
a) user fee collected from vehicles or
b) difference between amount paid to
NHAI and User fee collected ?
Q.3) How to recognise the Expenses ?
a) amount paid to NHAI or any thing..

CA Sumat Singhal

CA Sumat Singhal (Expert)

05 June 2011 Revenue should be recorded as per AS 9 revenue recognition , u can recognise revenue on weekly basis when fees is received and for charges paid to NHAI provision should be provided for...and for exp. Accrual basis may be followed...others members opinion r invited...Regards Sumat

Pankaj Gandhi Jaiswal

Pankaj Gandhi Jaiswal (Expert)

07 June 2011 Explain more about your agreement..you make clear that what is your profit element in this transaction. Is after payment to NHAI all amount is yours then book whole as a revenue when it accrue to you on real time basis

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