Construction Accounting Q&A Part 4 - Tax Treatment
Confused over contract accounting Q&A Part 4
Today we cover Q&A #4 on tax treatment as per IRB Public Ruling 4/2009 Construction Accounting.
These is normal part of our training note to our clients and new colleagues on contract accounting.
1 Determine date of commencement
* Date of letter of award
Or
* Date of actively carry construction work
2 Recognition of income
* Contract more than 1 year
* Contract completed in different accounting period
3 Separate source of income - Different contract different source.
4 Estimate loss on uncompleted contract - Allow to set off against estimated gross profit
5 Completion of contract
* Obtain certificate of practical completion
* Tax treatment of actual gross profit/loss
6 Others
* Unliquidated damage
* Warranty/defect liability expenses
* Guarantee fee