Question ID : 38002

Percentage Completion Method for Construction Company

If a construction Company has received permission for first 10 floors out of total 20 floors. Construction of 10 floors is completed and advances of more than 25% saleable area (of 10 floors) is secured by contracts/agreements. It is also proposed that Company will receive permission for 11-20 floors soon. Whether 10 floors can be considered as 1 unit and Percentage completion method be applied on it? OR Whether entire 20 floors should be considered as one unit since common spaces like lobby will be utilised for entire 20 floors only and consequently POCM to be ignored?

Since the company is having permission of only 10 floors in hand. Therefor the proportionate completion method should be applied considering the unit consists of 10 floor only. Proposal should not be considered right now since it is at proposal stage only.