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As 7 construction contracts

Arvind Ray (Practising Advocate CS LLB) (339 Points)

05 September 2011

what is the scope of "assets " in AS 7. will it include movable and immovable assets (both)? is this standard applicable for construction of things like computer, furnitures etc??

anticipating quick reply by our experts

arvind

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2 Replies

Nitin Garg (CA FINAL Article Trainee B.com) (171 Points)
Replied 05 September 2011

It includes both movable and immovable assets becasue,

According to AS-7:-

A construction contract is a contract specifically negotiated for the

construction of an asset or a combination of assets that are closely

interrelated or interdependent in terms of their design, technology and

function or their ultimate purpose or use.

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Arvind Ray (Practising Advocate CS LLB) (339 Points)
Replied 06 September 2011

but my specific query is whether for short terms contract( e.g a contracts for a period of less than 1 year) As 7 is applicable? whether AS 7 would cover a contract for construction of articles like furnitures, computer software, etc.