% completion long-term contract

% completion long-term contract

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Client has built block of 11 flats.. started Aug 05.. finished April 06.... sold 10 over period May 06 - Nov 06 and 1 still unsold.... what % completion and % of expected profit (if any) would you recognise in March 06 accounts for taxable income in 05-06?
Paul Gillham

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By AnonymousUser
18th Dec 2006 14:00

Probably none
There would only be revenue to recognise if:

a) the property was being developed as part of a contract (ie for a known buyer) or

b) where any individual flats were sold and contracts were exhanged before the year end.

From the question I assume that this was a speculative development so a) won't apply.

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