?What is the accounting treatment for dividends in construction companies and real estate investment


Dividends in construction and real estate investment companies

This treatment is carried out by both companies and investors and contains that there is a contract from one of the contracting and real estate investment companies who established the company with an investor.

Example: A contracting company comes and contracts with an investor to build a residential tower where the partnership is a percentage of profit or cost.This means that the company will build this tower and the proportion of the sale of residential units and the proportion of 30% of the profit or cost

It is equal to 1,000,000 of the Company account / account. 1,000,000 to the investor's current account / account.

1. JV on the payment of investors' funds to the company

The next step comes after the statement of extracting the cost of the project in terms of disbursement and pricing on the project. Both investors and founders bear the cost of the project under the laws of participation rates. Investor 's account in Al - Burj project 400000 to Al - Burj residential account.

2 . The cost of the project and borne by both the founders and the investor

The revenue phase, which equals 600,000, comes from the residential tower account (s). Based on this collection: 420000 to the account / income of the projects (the income of the projects = 70% there is a picture of this method in the site. 180000 to the account / income of the investor of the tower project and the income of the investor = 30% and here we have reached the cost of the project And its revenues with the knowledge of determining the profit resulting from the project for each investor and founder.

3. Revenue stage and collection from customers

400,000 of the dividend calculation of 280,000 projects to the cost of the projects of 120,000 to the cost of the investor tower project.

4 - Closing costs in the distribution account

420,000 of the project revenue account 180,000 of the account of the project investor tower 600,000 of the project profit distribution account comes the stage of subtracting the revenue of the cost of 600000 - 400000 = 200000 and this account is a current account of partners.

5. Closing the revenues in the distribution account


This phase is carried out at the expense of 200,000 projects and 140,000 dividends to a founding current account. The distribution of 60,000 li current investor account in the tower project shows us that the investor account becomes 100,000 + 60,000 = 1060000 with the possibility of repayment of this profit with the capital of other projects and taken 60,000 from the investor's current account. 60,000 to the treasury account.

6. Dividend Profits stage

More information on real estate investment can be found here