Canada invoice in construction

[horia]

Is it legal in Canada, in a long term construction contract, to invoice in advance for work that was not done?

 

[Fidget]

You'd have to look to the law of Contracts in Canada to figure that out. Generally though it is the contract between agreeable parties that decides whether work can be invoiced/paid in advance of it being carried out.

Accounting for it is a different matter as the revenue/expense in the respective parties accounts isn't recognised in the P&L until it has been classed as carried out, which brings in the added complication of work in progress for long term contracts.

 

[Steve-LevelUp]

To my knowledge, it is not illegal to invoice in advance, nor to pay in advance, so long as it is in agreement with both parties. As Fidget mentioned, the revenue/expense side of things must comply with GAAP under the percentage of completion method.

Regards
Steve