If a Company is engaged in real estate buisness and it does the following:
1. Does construction on someone else's property on a contract basis and issues a sale bill at the end of the construction containing the cost of materials, labour and other expenses.
2. Purchases land, constructs building on the same and sell it to the prospective buyers.
AS-7 is clearly applicable in the first case. Whether in the second case, the same would apply or AS-9?
Also whether receipt of advance from the buyer in the second case would be regarded as sales as per "Guidance Note on Real Estate Developers"?
CAclubindia
