Now with more thrust on Make in India, the happening of which primarily depends on various financials, statutory and physical infrastructure development. India being one of the fastest growing economy where in infrastructure and housing sector are key sectors which simultaneously brings in accounting and taxation issues. This article is aimed at bringing in the concepts and issues in recognition of revenue for construction contract and closely associated industry of real estate development. Taxation aspects are not dealt with in this article. However this has been touched upon in the light of Income Computation and Disclosure Standards (ICDS) which became effective from 01.04.2015. Further the distinction between the present accounting standard the IND AS has also been touched upon at appropriate places.
As the Technical terms are defined in the accounting literatures referred to in this article the same is not reproduced. Readers are requested to refer the accounting literatures referred to herein.
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