Revenue Recognition: AS 7 & AS 9 Require Separate Accounting for Maintenance and Construction in Contracts.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Recognition of contract revenue under Accounting Standard (AS) 7 - Maintenance activities cannot be clubbed with the construction activity. Having gone through the accounting standards (AS-7 and AS-9), we find that application of the standard to separately identifiable components of single contract is allowable while determining the percentage completion of the project.....