1. Is “Project Completion Method” an acceptable method of accounting for real estate projects under
the extant provisions of Ind-AS/ ICDS/ Income-tax Act, 1961/ Income-tax Rule, 1962 or any legal
provision or accounting standard as applicable?
2. If answer to 1 is yes, then does Project Completion Method dictate that revenue be recognised only
on completion of the said project. Also, if someone is correct to not disclosing any closing
stock under Profit and Loss Account in ITR?
3. If answer to 1 is No, then which method of accounting is applicable in the case. Is
the decision to not disclose any opening/closing stock and not recognising any revenue in
the P&L Account in ITR justified as per the applicable method of accounting in the case of the
assessee?
4. What changes in the accounting treatment of opening/closing stock and revenue recognition are
required in the Balance Sheet and P&L Account in ITR in the case of the assessee.
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Project competition method
Replies (1)
Refering to point no. 2. project completion method does not dictate, its a way of recognizing revenue.
A real estate company or an infrastructure company cannot show the entire profit or loss at one go.
Its based on accounting convention.
A real estate company or an infrastructure company cannot show the entire profit or loss at one go.
Its based on accounting convention.
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