ICAI to clarify AS for real estate co's-SEBI!!
The Securities and Exchange Board of India (Sebi) has asked the Institute of Chartered Accountants of India (ICAI) to clarify the accounting standards that real estate companies have to follow.
The capital market regulator has noticed that different real estate firms have been using varied methods for accounting revenues.
According to the ICAI, there are two methods of accounting for real estate revenues. The one followed by most companies accounts for revenues according to the stage of completion of construction. If a particular project is half complete, the company will account for half of the project revenues.
The other method is to account for the entire revenue only on completion of the project. ICAI officials said, “A few years back, we had issued real estate accounting guidelines, which advised companies to adopt the first method and recognise revenues on the basis of percentage of completion of the project.”
However, Housing Development and Infrastructure, the real estate arm of Wadhawan Group with operations in the Mumbai Metropolitan Region, are recognising revenues only on project completion.
Most real estate majors such as DLF and Omaxe follow the accounting method prescribed by the ICAI.
The ICAI’s stand, however, is not in line with international accounting principles such as the International Financial Reporting Standards (IFRS).
Real estate accounting is a controversial issue worldwide. The IFRS has recently come out with a draft interpretation that will require real estate companies to account for revenues only on completion of the project. That directly contradicts the ICAI’s accounting policy treatment.
Sebi has, therefore, asked the institute to clarify on the correct accounting method to be followed by domestic real estate firms.
“The expert advisory committee of the ICAI is examining the matter and will give its opinion to the regulator,” officials said.
News posted by
CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
Recent News :
- UPI MDR on Transactions Above Rs 2000: FM Sitharaman Clarifies Who Will Pay
- RBI Issues New Basel III Market Risk Capital Directions for Commercial Banks
- Petrol Dealers May Limit UPI Payments Above Rs 2000 From 16th October
- Tax Audit Deadline 2026: Professional Bodies Seek Extension to 31st October
- GSTN Announces emSigner 3.3 for New DSC USB Tokens Issued From 21st September 2026
- UPI 0.4% MDR Above Rs 2000: Grocery Shop Sign Sparks Fresh Debate
- India's STT Collections Rise 52.9% to Rs 40,214 Crore by 17th Sept 2026
- India to Monitor UPI MDR Charges to Protect Consumers from Extra Costs
- Central GST Superintendent Arrested in Bengaluru Over Alleged Rs 8 Lakh Bribe
- CBDT Revises Form 169 and Form 171 Under Income Tax Rules 2026
Popular News
- Tax Audit Deadline 2026: Professional Bodies Seek Extension to 31st October
- AIMTPA Seeks Tax Audit & ITR Due Date Extension for AY 2026-27
- MTPA Seeks Tax Audit Deadline Extension: TAR by 31st Oct, ITR by 30th Nov 2026
- CBDT Notifies SFT Rules for Depository Transactions Under Income Tax Act 2025
- CBDT Notifies SFT Reporting Rules for Mutual Fund Transactions by RTAs Under IT Act 2025
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
