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As - 7 plz. help me
Contract price is Rs. 5.6 lakhs
cost incurred to date is Rs. 5 lakhs
work certified is Rs. 4.2 lakhs
work uncertified is Rs. 2 thousands
further cost to complete 2 lakhs
plz. Tell me in p/l account what amount should be debited as construction cost . Whether it is work certified or actual cost incurred.
Thanks...!
Replies (3)
as per as 7 in the main P/L ac u directly recognise the profit or loss on the contract and in this case u should recognise a loss of Rs.1.4 lakhs.
AS-7 and principal of conservatism says that " you should provide for loss of Rs. 2.00 lacs and thus total cost recognised should be Rs. 5.00 lacs plus Rs. 2.00 lacs i.e, Rs. 7.00 lacs
thanks
Thanks sir.!
But i want to know the the exact amount to be recognise as current years revenue based on percentage completion method .
Is there no effect of work certified on this ?
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