Method of accounting

AS-9 of the ICAI - Method of accounting - uncertainty in ultimate collectability of revenue justifies change of method of accounting by property developer from percentage of completion to recognition of income based on registration of agreements for sale or completion of possession and consequential reversal of revenue on cancellations/legal cases. This change in method of recognition of income, as adopted by assessee was in terms of relevant accounting standard laying down prudential norms of revenue recognition, and the same was legally correct.


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