Dear All,
I had a query relating to accounting of receipt of fees relating to submission of feasibilty report in the books of accounts. Our client is a member of a consortium and lead member of the consortium is the other party. The consortium got an assignment for providing services for study and preparation of detail feasibility report for implementation of urban trasport management system. The fees relating to this assignment is given to lead member and lead member transfers certain percentage of total receipt to our client as per agreement. Now the issue is that our client wants to book whole amount of fees in its books of account and charge that percentage of total fees pertains to lead member as an project expense in order to increase its turnover instead of booking his share of fees. Can our client do the same if yes then what can be the possible outcome and what entry will it pass in its books of accounts? Please reply.
Regards
Gurmeet Singh
CAclubindia
