Revenue recognition of contract income

Question

Could you please look in to and clarify the doubt.

A real estate property (33% completed) has been acquired by our company for 10 million. We have paid them  2.5 million in cash consideration and balance in units (flats/rooms in project).

Do we need to recognize the contract income in the year of transfer of property for the units allocated to the seller of the project?

It will be great if it can substantiate with applicable standards for my reference.
 

Comments

can you elaborate your question more???

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A real estate property (33% completed) has been acquired by our company for 10 million. We have paid them  2.5 million as cash consideration and for balance we issued some units (flats/rooms) in the same project which we are going to construct.

Do we need to recognize the income on these units which we have allocated to the seller of the project, in the year of transfer of property?

Answer 1

I doubt whether I understood your question.If the ownership of the allocated units/rooms is with the seller, then you don't need to recognize any income from those units.

Comments

I concur with you. There is no revenue to be recognized here. First rooms are not available as the building is not completed and operational. If you issued some units that means you both own the 75% remaining . Further information is required and each company will recognized revenue based on their units  share.