RETENTION MONEY

[Muhammad Rehman]

MY DEAR forum FELLOW!
I AM WORKING IN PRIVATE CONSTRUCTION COMPANY . WHEN WE PAYMENT TO SUB CONTRACTOR WE DEDUCT SOME AMOUNT AS RETENTION MONEY .
SO WHAT MEAN IN ACCOUNTING STANDARDIZED.

[Abuzar Qazi]

Retention money signifies the amount which is kept for the reason that one party may not execute and perform the contract or perform in a way different from the one that is mutually agreed on........Its a Liability of the company and to be classified either as current or non current keeping in view the outstanding time.