Work in progress

IFRS 824 views 1 replies

Hi All,

Background:

Electrical Industry and we get some bulk order to manufacture some goods specific to customer requirements.

Here to get these orders we incur some expenses like airfare , some professional service fees which is a considerable amount.

The project will be completed in phases, i mean the delivery of the entire goods will not happen at the same time and it may happen over the period of year to two years.

 

Query: With this background, currently we are treating these enitire expenses incurred for getting the project as period expenses. Now we have an argument that these should be capitalised as work in progress and settle to P&L Account in proportion to goods delivery at the end of Fiscal Year.

 

Please clarify what is the standard Accounting treatment of these expenses. Which accounting principle or standard deals with it.

 

Regards

Venkat

 

Replies (1)

Cost of Obtaining a Contract For example cost of selling, marketting , advertising, bid, proposal, negotiations etc. needs to be expenses as and when incurred as period cost. The guidnace on this issue has been given in Para 59 Clause (a) of ED Revenue from Contract with Customers.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
12 June 2026
Accounts & Taxation Executive

Winshine Financial Services

Mumbai

CA Inter

View Details
Company
24 May 2026
Accounts & Tax Executive

PARAS KHURANA AND CO

New Delhi

B.Com

View Details
Company
Featured 26 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
16 June 2026
Sr. Associate / Assistant Manager | TAS / FDD

Boutique Investment Bank & Transaction Advisory Firm

Gurgaon

CA

View Details