Revenue recognition - threshold limit, Income Tax

[hubert fernandes]

we are builders and have adapted percentage completion method of revenue recognition as prescribed in AS7.However revenue on sale agreements is recognised only when we reach a threshold limit of 20% vis a vis the estimated cost.I would appreciate if any case laws are referred wherein such threshold limits are allowed for computation of business profits

Posts / Replies

[Surender Gupta]

In my view any case law on the subject would be based on case to case basis because this issue is an issue of fact and facts may be different in each case. The recognition of revenue as per your agreement to the extent meets the requirements of AS7 or related standard issued by ICAI itself is a satisfactory situation.