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- Feb 2, 2015
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Hello all, I have queries on performance bonds here. From what I see and understand, this serve as insurance and confidence for those developers before pumping their money in.
However, as we are not required to pay out the amount unless the contract are not carried out, is there any constructive obligation in the first place? we are required to set aside some funds for this, but all these funds are not going to be used if everything goes smoothly right?
I am kinda new in the working industry and would need guidances in how to treat and record this events. no cash is credited from the bank side, but we are not allowed to use the money as it need to be keep aside in the event that we need to pay it out.
However, as we are not required to pay out the amount unless the contract are not carried out, is there any constructive obligation in the first place? we are required to set aside some funds for this, but all these funds are not going to be used if everything goes smoothly right?
I am kinda new in the working industry and would need guidances in how to treat and record this events. no cash is credited from the bank side, but we are not allowed to use the money as it need to be keep aside in the event that we need to pay it out.