The company is in the business of construction buildings and leasing them for use. Essentially, their revenue source is lease rent. Question is the material and furniture they purchase for construction of these buildings, which have not been used yet, should be recognised as inventory as per AS 2 or fixed asset as per AS 10 (Ind AS not applicable)? Thanks.
Menu
Whether material to be used in construction of fixed asset to be grouped as inventory or fixed asset
Replies (5)
Quick Summary
Inventory..
In my opinion to be recorded as Fixed asset
You group them under CIP (Construction in progress) and capitalize it once it is used in building as a Fixed asset if your business was other rather then construction. but since you main source of income and venture is construction of building it should be treated as Inventory.
| Originally posted by : Harsha Shetty | ||
 |
You group them under CIP (Construction in progress) and capitalize it once it is used in building as a Fixed asset if your business was other rather then construction. but since you main source of income and venture is construction of building it should be treated as Inventory. |  |
No the main and only source of income is LEASE RENT, not construction service or sale of building.
Investment property. Treat it as inventory.
Recent Topics :
- ITC availed on 5%-rate passenger transport (AC bus
- Extension of Due Date of AY 2026-27
- FAST DS 2026
- Does AIS GST Purchase aggregate GSTR-2B expenses?
- Form 26A - System has encountered some technical p
- Tool to convert GST invoice PDFs into Excel —
- Revised or rectification or leave it?
- Private limited tax audit
- LTCG - SEC54
- Foreign remittance from our client for Co Working
Related Topics :
CAclubindia
