Loss should be recognized immediately if contract cost is likely to exceed revenue

It is undisputed fact that the construction was badly damaged due to floods and its negative effect and the expenditures incurred to maintain bus stand and commercial complex was not recoverable under BOT. As per AS-7 when the cost of contract is likely to be exceed the contract revenue then the loss incurred on the contract should be recognized as revenue expenditure immediately.

1. The brief facts of the case are that the assessee is a Developer and engaged in the business of construction, running and oper

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