How to account for in Books

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Drae Experts,

My Four Clients being Individuals engaged in Construction of  residential tenaments/Row Houses for their self occupied purposes. Each individual is assigned to construct 7-8 Houses as developer for which  a development  agreement is made between deloper & Land Owner(i.e.Member).each land owner is acquired  his residental Plot by way of  registered Sale deed seperately. Each Developer has given estimated constructed cost to each member.Developer is getting progressive payments towards said construction cost from each member.The relevent work has started in Feb,2010. All bills related to direct cost are taken in the name of Developer.(viz.Matikam,sands,Bricks, Cements,Steels etc.)

My Query is How such expenses/ progressive payments are to be booked in the books of each Developer (i.e. either as WIP/ Advance from Members till completion of house property or otherwise manner.

Please Advice.

Replies (1)

Dear Sanjay Sir,

Regarding recognition of revenue & costs are concerned plz go through AS-7 Construction Contracts & Guidance note on Real Estate Developers.

Further, I think U have to check the exact nature of this consortium in the lights of AS -27 Financial Reporting of Interest in Joint Venture.


CCI Pro

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