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Accounting guidelines 4 Contractors'/Builders' book keeping

CA Ashish Joshi (CA) (265 Points)

18 January 2011

Hi all,

If anybody has experience of Contractors' OR / AND Builders' book keeping then please guide me for their specific considerations.

For example,

Apart from normal book keeping, we have to focus on TDS. Also how the inventory valuation is done ???

Which accounting standards to be focused in deep???

Etc....

Looking forward for valuable replies......... Its urgent.

Everyone can contribute for their little knowledge for the any of the known area for Contractors / Builders.

Together we will have all queries sorted out....

Please post your knowledge here.

Thanks & regards,

Ashish Joshi

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6 Replies

CA Anshu Agarwal (B€ @LW@¥$ ]-[@Pp¥) (1832 Points)
Replied 19 January 2011

Apart from normal accounting, the accounting standard -7 is to be followed for accounting for contractors.

i am herewith submitting the summarised AS-7.

Attached File : 3 as 7.pdf downloaded: 789 times

CA Ashish Joshi (CA) (265 Points)
Replied 19 January 2011

Thanks for the valuable reply.

Actually I know about AS-7 & in need of Comprehensive guidance for the topic under discussion.

The reason is that my conversation with one of my clients are under WIP & likely to be materialise.

If you can help by deep guidance then it would be a pleasure for all concerned people.

Thanks again.

V P Narasimhan (Accounts Manager) (791 Points)
Replied 22 January 2011

Dear

Revenue accounting tome made as per AS 7 - Pl find encld a file for your easy reference. As fat as WIP is concerned All the expenses viz., ram materials (Steel,Cement etc., etc) incurred for the project up to the a/cing year end along with labour expenses & the entire expenses has to be treated as W I P since its an ongoing un completed project.

Attached File : 37 revenue accounting.xlsx downloaded: 523 times

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V P Narasimhan (Accounts Manager) (791 Points)
Replied 22 January 2011

Dear

Attached File : 37 revenue accounting.xlsx downloaded: 359 times

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CA Ashish Joshi (CA) (265 Points)
Replied 25 January 2011

Thanks a lot Narasimhan sir,

I was a great help for me and also other related people as you can see the information given by you has been downloaded for good number of times.

Thanks a lot sir & keep sharing. I request other knowledgeable people to share their information here for complete knowledge of Contract/Builders' accountancy.

Thanks & regards,

Ashish Joshi

V P Narasimhan (Accounts Manager) (791 Points)
Replied 25 January 2011

Dear all

I have forgetton to add one more point ie., while accounting WIP it should be based on Management's Policy (which will be furnished in the Notes on Accounts) For example if the Managemnt Policy declared that Less than 20% (or 10% as the case may be) of the Project Cost (Project exp) will not be comes under the purview of WIP it can be treated as Expenses only and it need not be accounted as W I P. But it depends upon the Project Value. For example if the Project Value is 80 lakhs and expenses incurred is areound <5.00 lacs it need not be considered as WIP since its less than the declared value for accounting WIP as per the Management Policy & it attracts its own benefits.

1 Like