banner_ad

Doubt in as 7 disclosure point.

AS 1695 views 2 replies

please help....

Why in AS 7- "Construction Contract" it is stated two times to disclose method  when there is only one method i.e. Precentage oF completion method

one time asked for the amount of revenue...and second time for stage of completion ..!!

 

Replies (2)

Under  AS-7 contract Revene Recognition. the calclation of Percentage of Completion and  application of the same in to the contract revenue is 2  different steps. Percentage of completion arrived based on the total contract value and work done. but the based on the completion we need to apply the percentage and need to deduct the earlier recognised reveune and need to arrive the revenue for the particular reporting period. so there is 2 calculations and both calculaiton need to be disclosed

What Ramesh said that is correct.

I am going to give one example for Revenue Recognition

Contract Value - 100 Rupees

Planned Cost - 80 Rupees and Planned Revenue - 100 Rupees

Jan  Month Cost  - 20 Rupees.

Jan Month Revenue - 20 Rupees

POC = Actual Cost / Palnned Cost

POC = 20 / 80

POC = 25%

Actual Revenue is 20 Rupees. But As per the POC Method revenue should be 25 Rupees.

Difference Amount also we need consider as revenue (25 - 20 ) = 05.

So'We need to Recognition the Revenue as per the POC Method (100X25%)=25

 

 

 


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 19 March 2026
Article Assistant

Gupta Sachdeva & Co. Chartered Accountants

New Delhi

CA Final

View Details
Company
Featured 28 March 2026
CA Final

Ashok Amol & Associates

New Delhi

CA Final

View Details
Company
Featured 14 April 2026
GST CONSULTANT

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 13 April 2026
GST CONSULTANCY

Abhishek G Agrawal & Co.

Korba

CA Final

View Details
Company
Featured 28 March 2026
Accountant

Ashok Amol & Associates

New Delhi

B.Com

View Details