What is the concept of revenue recognition by the construction unit in accounting?

The project income refers to the initial income specified in the contract. The settlement income of the project price realized by the enterprise for the contracted project, as well as the various payments collected from the contract issuing unit other than the project price that are listed as business income according to the regulations, such as temporary facility fees, labor insurance premiums, construction machinery relocation fees, etc., as well as various claims collected from the contract issuing unit.

It refers to the settlement income of the project price realized by the enterprise for the contracted project, as well as the various payments collected from the contract-issuing unit other than the project price that are listed as business income according to the regulations, such as temporary facility fees, labor insurance premiums, construction machinery relocation fees, etc., as well as various claims collected from the contract-issuing unit.

The project income refers to the initial income specified in the contract.

Principles of Project Revenue Recognition:

1) If the outcome of the construction contract can be reliably estimated, the enterprise should recognize revenue at the balance sheet date according to the percentage of completion method.

2) If the outcome of the contract cannot be reliably estimated, the following situations should be distinguished:

First, if the contract cost can be recovered, the revenue is recognized according to the actual contract cost that can be recovered.

Second, if the contract cost cannot be recovered, the project income will not be recognized.

There are generally three ways for construction enterprises to recognize revenue, as follows:

1. The revenue of the current period is recognized by multiplying the actual amount of work completed by the enterprise in the current period by the unit price of the list. The advantage of this method is that the actual consumption of materials, labor and machinery in the current period is closest to the proportion of revenue recognized in the current period, which is convenient for accounting cost accounting; The disadvantage is that the actual amount of work completed by the enterprise has not been approved by the owner, nor has it passed the verification of the supervision engineer, and there are great uncertainties in the current income, and part of the workload may be falsely reported by the enterprise or although it has occurred, but the supervision and the owner do not recognize it for quality or other reasons, which causes the income to be untrue;

2. It is recognized as income by the workload signed and approved by the supervising engineer in the measurement and payment report submitted by the enterprise. It is also based on the actual quantity of work completed multiplied by the unit price of the bill of quantities. Recognition of current incomeAlthough the income recognized by this method has not been approved by the owner, there is no special reason, and the owner will generally recognize it;

3. It is recognized as income based on the workload on the metering and payment table approved by the owner. This method recognizes the most accurate revenue and has statutory benefits. However, its disadvantage is that it is too lagging behind, and when the owner's approval is returned to the enterprise to make income, the costs and expenses incurred are already the data of the next period, which is that it is difficult to achieve a reasonable ratio of income and expenses in the current period.

Of course, there are other revenue recognition methods, but they are less commonly used and will not be repeated for the time being. In general, it is relatively simple and reasonable to recognize the income based on the workload on the metering payment table signed and approved by the supervising engineer.

The construction of the project and the provision of labor services and operations, as well as the settlement bills of the project price issued by the construction enterprise, shall be recognized as the realization of operating income after the visa of the contractor; When a product is sold or traded in a commodity to send out a product, and the payment for the goods is received at the same time or a receipt of the payment receivable is obtained, it is recognized as the realization of operating income. "The new standard distinguishes between different situations and makes different confirmations. The guidelines provide that "if the outcome of a construction contract can be reliably estimated, the enterprise shall recognise contract revenues and expenses at the balance sheet date in accordance with the percentage of completion method."

Dear, I am glad to answer for you: Accounting basis for revenue recognition of engineering construction projects A: The degree of completion is confirmed according to the progress of the image, but the accounting is based on the accounting of payable expenses and accrued income.

1. Construction enterprises shall recognize revenue in accordance with the construction contract standards. 2. The cumulative recognized revenue is determined according to the percentage of completion: Cumulative Recognized Revenue = Estimated Total Revenue * Percentage of Completion Revenue Recognized in the Current Period = Estimated Total Revenue * Percentage of Completion - Cumulative Recognized Revenue in the Previous Period Recognized Cost in the Current Period = Estimated Total Cost * Percentage of Completion - Cumulative Recognized Cost in the Previous Period Total Contract Gross Profit = Estimated Total Revenue - Estimated Total Cost Current Contract Gross Profit = Current Contract Revenue - Current Contract Cost or Contract Gross Profit * Percentage of Completion Recognized Current Contract Revenue, Contract Expenses and Contract Gross Profit, Do the following accounting processing:

Borrow: Main Business Cost Engineering Construction - Contract Gross Profit Loan: Main Business Income Accounting Treatment of Construction Enterprise Related Income 1. When Receiving Advance Project Payment Borrowing:

Bank Deposit Credit: Accounts Received in Advance Tax Payable - VAT Payable - Output Tax 2. When the project is completed and settled: Borrow:

Accounts receivable in advance Accounts receivable Credit: Project settlement income 3. When carrying forward income: Debit:

Main business income Credit: main business cost Management expenses Sales expenses Profit for the year How to account for the settlement of project payments between construction enterprises and Party A? Through the "project settlement", the construction enterprise and Party A are collected to settle the project tie-up payment.

When the project price settlement statement is issued to the owner for settlement, the following entries shall be prepared according to the amount listed in the settlement statement: Debit: Accounts receivable Credit:

Project settlement tax payable - sales tax to be transferred (or VAT payable - output tax).

According to the provisions of the "Accounting System for Construction Enterprises", the income of the project price of the enterprise should be recorded in a timely manner when it is realized. Specifically, it is divided into three situations: (1) If the project contract implements the method of settling the project price at one time after the completion of the contract, it shall be recognized as the realization of income when the contract is completed and the construction enterprise and the contractor settle the project, and the amount of income realized shall be the total contract price settled by the contractor and the contractor.

2) the implementation of the end of the month or the middle of the month advance, the end of the month settlement, after the completion of the settlement of the project contract, should be phased to confirm the realization of the contract price income, that is: the end of each month collapsed, and the contract unit for the completion of the project price settlement, confirmed for the contract has been completed the part of the project income realization, the amount of income in the current period is the amount of the completed project price at the end of the month. (3) The implementation of the project image progress of the project into different stages, the method of settling the project price in stages, should be confirmed according to the image progress specified in the contract, the realization of the project income of the completed stage should be confirmed.

Project progress payment refers to the sum of various costs calculated according to the number of projects completed month by month (or image progress, or control interface, etc.) during the construction process.

For most new accountants, the content of accounting practice of construction enterprises is more complicated. How is revenue recognized? How to deal with the accounts related to income? These are some relatively basic accounting problems, so let's follow the deep space network to understand it.

How do construction companies recognize revenue?

1. Construction enterprises shall recognize revenue in accordance with the construction contract standards.

2. The cumulative revenue recognized is determined based on the percentage of completion:

Cumulative Recognized Revenue = Projected Total Revenue * Percent Complete.

Revenue Recognized in the Current Period = Estimated Total Revenue Socks * Percentage Completed - Cumulative Revenue Recognized in the Previous Period.

Current Recognized Cost = Estimated Total Cost * Percent Complete - Cumulative Recognized Cost in the Previous Period.

Total Contract Gross Profit = Estimated Total Revenue - Estimated Total Costs.

Current Contract Gross Profit = Current Contract Revenue - Current Contract Cost or Contract Gross Profit * Percentage of Completion.

Recognize the current contract revenue, contract expenses and contract gross profit, and do the following accounting treatment:

Borrow: Cost of main business.

Construction – Contract gross profit.

Credit: main business income.

Accounting treatment of income related to construction enterprises.

1. When receiving the advance payment for the project.

Borrow: Bank deposit.

Credit: Accounts received in advance.

Tax Payable - VAT Payable - Output Tax.

2. When the project is completed and settled:

Debit: Accounts receivable in advance, accounts receivable.

Credit: Project settlement income.

3. When carrying forward income:

Borrow: main business income.

Credit: Cost of Principal Operations.

The management fee is inclusive of the charge.

Selling expenses. Profit for the year.

How to account for the settlement of project payments between construction enterprises and Party A?

Through the "project settlement", the construction enterprise and Party A are collected to settle the project payment.

When issuing a project price settlement statement to the owner for settlement, the following entries shall be prepared according to the amount listed in the settlement statement:

Debit: Accounts receivable.

Credit: Project settlement.

Tax payable – the amount of output tax to be transferred (or VAT payable – output tax).

The project income refers to the initial income specified in the contract. The settlement income of the project price realized by the enterprise for the contracted project, as well as the various payments collected from the contract issuing unit other than the project price that are listed as business income according to the regulations, such as temporary facility fees, labor insurance premiums, construction machinery relocation fees, etc., as well as various claims collected from the contract issuing unit.

It refers to the settlement income of the project price realized by the enterprise for the contracted project, as well as the various payments collected from the contract-issuing unit other than the project price that are listed as business income according to the regulations, such as temporary facility fees, labor insurance premiums, construction machinery relocation fees, etc., as well as various claims collected from the contract-issuing unit.

Generally speaking, the project accounts of the construction unit are paid according to the percentage of project completion, and the accounts receivable account can be accounted for through the accounts receivable account, how should the specific accounting entries be prepared? Min Pat

The accounting entries of the construction enterprise receiving the project payment.

1. When receiving the project payment.

Borrow: Bank deposit.

Credit: Accounts Receivable Accounts Receivable in advance

2. At the time of settlement, debit: accounts receivable and accounts receivable in advance.

Credit: main business income.

Borrow: Cost of main business.

Credit: Engineering Construction

What is Accounts Receivable?

Accounts receivable refers to the amount of money that an enterprise should collect from the purchasing unit or the receiving unit for business activities such as selling goods and providing labor services. It is an asset class account. The recorded value of accounts receivable includes the contract or agreement price that should be collected from the purchaser or the recipient of services such as the sale of goods and the provision of labor services, except for unfairness, the output VAT tax, and the packaging costs, transportation and miscellaneous expenses paid by the first cargo unit.

The difference between accounts receivable and accounts receivable.

1. Accounts receivable is an asset account.

Accounts receivable refers to the amount that an enterprise should collect from the unit that purchases or receives labor services due to the sale of goods and the provision of labor services, and is the creditor's right formed by the enterprise due to the business activities such as selling goods and providing labor services.

2. Accounts receivable in advance are liabilities.

Advance receivables refer to the amount collected in advance from the purchasing unit in accordance with the provisions of the contract. The payment received in advance by the enterprise before delivery shall be regarded as a liability of the enterprise.

3. When selling, it is the accounts receivable that collects the money first and then pays the goods, and it is the accounts receivable that collects the money after the first payment.

What is Engineering Construction?

The construction of the project is mainly to account for the expenses incurred by the enterprise in the construction and installation of the project, in accordance with the provisions of the accounting system of the construction enterprise, the contract cost and contract gross profit should be set up under the construction of the bridge banquet project. It is a cost account.