Construction occupies an important place in the structure of the economy of any country. Hundreds of thousands of people work in this area. They sell various industrial and other facilities and erect new residential neighborhoods. All processes in construction, reconstruction of buildings, major repairs are carried out in stages. Each stage is important, starting from the development of the concept, design and working documentation, engineering and geodetic surveys and ending with the registration of the finished object. Consequently, accounting in construction is peculiar and requires special industry knowledge and practical experience from an accountant. You can find out some of the nuances of construction accounting below.
Specifics of accounting in construction
Accounting and tax accounting in construction organizations is conducted in accordance with regulatory documents and the “Accounting Policy” developed by each organization for internal use. When creating such a document, it is necessary to take into account the specifics of the industry and the enterprise itself, which can act both as a developer (customer) and as a contractor (general contractor, subcontractor).
The specifics of accounting in construction are related to the specifics of its activities. Thus, accounting in construction requires attention, including to:
- individual features of each construction object;
- territorial fragmentation of construction objects;
- natural specifics of construction (climate, soil, season and other conditions leading to additional and specific work and costs);
- the need for lengthy preparatory work (project development, obtaining permissions, etc.);
- the variety of types of construction and installation works;
- multi-stage mutual settlements of construction entities;
- other nuances.
Despite the specificity of accounting in construction, it is based on generally accepted principles and standard accounts. At the same time, the builders:
- use a specific construction supporting documents (deeds, registers, cost sheet, certificates, etc.);
- form detailed object analytics;
- often need to register (de-register) separate units, which affects the nuances of taxation and accounting of housing construction;
- have difficulties in carrying out inventory (related to the specifics of the materials used, the disparity of warehouses and facilities, etc.);
- need to develop special accounting algorithms for accounting of certain types of expenses (uniform distribution of costs over time, the possibility of one-time inclusion in expenses, nuances of overexpenditure, compensation, etc.) due to the presence of specific construction costs;
- can have other accounting features.
The accounting in construction should be made so that the income and expenses for each construction object are grouped separately and allow you to form a financial result for the objects.