Change in accounting policies

Dear Vineet,

I think that all the above expenses are general in nature. Further company has to incure such expenses even if the construction stop for eg:- Some employee who may not be on construction site as they are hired for administration purpose, capitalising the profession tax of employee hired for administration purpose does not seems to be advisable. Adding to that the mentioned expenses are not directly attributable to the particular contract. M/s X is advised not capitalise the expenses.

Regards

Dear Vineet,

To my view, it is illogical to assign general expenses such as professional service fee, audit fee etc. to particular construction contract WIP. It can be considered as head office support to construction contract and should be allocated to these contracts on reasonable basis (cause and effect method) such as Aditors time allocated to particular contract etc. and should be shown on the P&L account, not WIP Inventory.

Best REgards,

Bhaskar

Thanks a lot Mr.Bhaskar:0

It's my pleasure Vineet...