Construction contracts

No. Marketing expenses (or selling expenses) cannot be considered as part of direct cost. Para 19 of AS-7 reads as under:

"Costs that cannot be attributed to contract activity or cannot be allocated to a contract are excluded from the costs of a construction contract. Such costs include:

(a) general administration costs for which reimbursement is not specified in the contract;

(b) selling costs;

(c) research and development costs for which reimbursement is not specified in the contract; and

(d) depreciation of idle plant and equipment that is not used on a particular contract"

Point (b) explicitly excludes selling costs from direct cost / contract related costs and hence should not be considered for percentage of completion

Menu

Siddharth

Siddarth R Sunder Ram

Leave a Reply

Recent Threads

Related Threads

Latest Job Openings

Senior Chartered Accountant

CA Article /Trainee

Account Assistant / Article Clerk

Accounts and Audit Assistant

Audit clerk

Accountant

Account Executive

ICSI Trainees for 21 Months and Semi-Qualified CS