sale of part of building

[PARVEEN ARORA]

Dear All,

Kindly guide me on issue on  sale of 1 Floor out of  4 Floors in a building by a construction company.

actually want to know about both issue : 

1) if land is purchased by construction company , it build 4 Floor building and sold out 1 floor .

2) if 4 floor finished building was purchased  by construction company and sold 1 floor from it.

How to calculate the closing stock for the company

Kindly oblige

[CAGOPALJI AGRAWAL]

You have to apportion the cost in both cases by approved valuation engineers.

AI Summary

Cost apportionment governs closing stock when a construction company sells part of a building; use approved valuation engineers. The company must apportion the cost between the floor sold and the portion retained for closing stock calculation; in both construction-from-land and purchase-of-finished-building scenarios this apportionment should be made by an approved valuation engineer and used to determine inventory valuation and closing stock.