12-20-2009, 01:11 AM
Zia
Sorry I cannot reply the question with certainty since the question does not tell how the revenue is expected to be earned. Factory is not constructed, business is not started, no economic activity has been undertaken. In such situation revenue can come in the shape of Mann-o-salva only and yes if this happens, revenue should be booked.
The only thing which appears from the circumstances is the expected agricultural produce that could have already grown on the land at the time of its purchase (since it is still agricultural) that can result in some agri revenue in the intermediary period.
The company's objective is not to carry on agri business, if this is the intent of question. So, any such inflow will not be taken as revenue. Instead it will be taken as a periodic or deferred gain and may be offset against capital expenditure once the construction starts.
This reply is, I believe, an illetrate one and merely to find a way out; but to my understanding there appears no other solution to this mystry.
Regards
Kamran.
Sorry I cannot reply the question with certainty since the question does not tell how the revenue is expected to be earned. Factory is not constructed, business is not started, no economic activity has been undertaken. In such situation revenue can come in the shape of Mann-o-salva only and yes if this happens, revenue should be booked.
The only thing which appears from the circumstances is the expected agricultural produce that could have already grown on the land at the time of its purchase (since it is still agricultural) that can result in some agri revenue in the intermediary period.
The company's objective is not to carry on agri business, if this is the intent of question. So, any such inflow will not be taken as revenue. Instead it will be taken as a periodic or deferred gain and may be offset against capital expenditure once the construction starts.
This reply is, I believe, an illetrate one and merely to find a way out; but to my understanding there appears no other solution to this mystry.
Regards
Kamran.
