Questions & Answer

?What is the concept of expenses in both the contracting activity and the real estate investment activity


Real estate investment does not differ from the operating activity of others (contracting) in terms of documents, such as extracts of subcontractors, as well as wages and labor disclosure, as well as permits for the exchange of materials;

However, in real estate investment any expenses from the above is not recognized as expenses, but can prove that it is current assets - real estate investment - because of the length of the period in which revenue is recognized;

It differs from operating to others as in the operating activity of others is prepared a monthly income extract and is accounted for, and therefore there are expenses corresponding to revenue;

In real estate investment project owner here is the general contractor; Consequently, in order to recognize revenue, units must already be sold and delivered or the unit completion rate should be more than 50%;

Thus, to prove revenue two problems arise:

First: - Is the unit sold or not where the revenue is not proven unless the unit has already been sold

Second: - If the sale is when the revenue is recognized