Such grants can be shown either individually or under a sub-heading which is a heading and is general in nature like "Other income"; or else, they are subtracted in accounting the connected expense.
In the afterthought to paragraph 9 of IAS 18, sales of Real estate is stated as: "Revenue is normally recognized when legal title passes to the buyer. However, in some jurisdictions the equitable interest in a property may vest in the buyer before legal title passes and therefore the risks and rewards of ownership have been transferred at that stage. In such cases, provided that the seller has no further substantial acts to complete under the contract, it may be appropriate to recognize revenue".
At the present time, real estate creators understand IFRSs otherwise and record revenue for the sale of the estates at different times. Some real estate creators document revenue only after they have passed on the finished unit to the buyer, while others record revenue in advance, as construction progresses, by indication to the stage of completion of the real estate for sale.
This explanation p
This explanation proposes to standardize accounting pattern amongst real estate creators for sales of units, like apartments or houses, 'off plan', that is prior to construction being completed. As of now, real estate creators adopt the option of either to record the revenue only after they have actually handed over the finished unit to the buyer or before, as construction progresses, by referring to the stage of finishing construction of the development. The understanding suggests that revenue should be entered as construction builds up only if the creator is rendering construction services, and not only selling goods (for example completed real estate units). It also suggests features that suggest that the vendor is giving construction services.
The accounting treatment would not have been different even if there was rent guarantee on only some of the flats.
It is essential that particulars of all monies received either as advance or otherwise are identified and properly recorded so that collections on or before the due date becomes easier. Also if refund takes place then the company has to record it as and when it takes place. Such refund