IND AS rule: Real estate firms fear additional compliance, paperwork

The implementation of IND-AS-115 rule will increase compliance and clerical work for real estate companies apart from forcing them write back profits of previous years from all projects which are not complete, developers said.

As per the new norm, real estate companies will have to switch to the project completion method from the existing percentage completion method. Under the previous norm, home buyer payments toward the purchase of under construction flats were declared as turnover by companies and net income generated from such projects was treated as profit. 

“The developers would need to write back the profit booked till date on all