AS-7 deals with accounting for treatment of revenue and costs associated with construction
contracts in the financial statements of contractors. The revised AS-7 recognises only the percentage completion method and is to be applicable only to the construction contractors’ financial accounting.AS-7, Construction Contracts, wherever percentage completion method is appropriate (as most of the real estate transactions and activities have the same economic substance as construction contracts), whereas, in respect of transactions of real estate which are in substance similar to delivery of goods, principles enunciated
in accounting standard (AS) 9, Revenue Recognition, are applied.


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