Accounting for an item that is both an expense (or WIP) and an income

Discussion in 'General Accountancy Discussion' started by Ibrahim, Jul 11, 2018 at 9:04 AM.

  1. Ibrahim

    Ibrahim

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    Dear Friends

    I'm in the Real Estate Industry involved in renting out the residential property on annual basis (Operating lease)
    Let's say i'm renovating an existing property, which is going to take 1 year. For this renovation, i have appointed, on contract basis, 4 civil project managers. I'm accommodating them in one of my own properties without charging any rent. So, this way, i've two expenses to be charged to this project, i.e. (1) salary for the project managers and (2) The accommodation rental (i'm not paying any rent but i'm losing the rental revenue).

    My questions:
    1. As far as accommodation rental is concerned, is it correct if i debit WIP and credit Revenue for rental amount?
    2. If the above journal entry is fine, is it acceptable to credit revenue without having any debtor in debit?

    Please respond in detail with reference to relevant IFRS
    Thanks in advance
    Best Regards
    Ibrahim
     
    Ibrahim, Jul 11, 2018 at 9:04 AM
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  2. Ibrahim

    ladyrider

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    How can you claim "lost revenue" on a property that isn't fully renovated and placed in service?
     
    ladyrider, Jul 11, 2018 at 3:20 PM
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