The Indian government is all set to drop the new rule from International Financial Reporting Standards (or as the accountants call it IFRS) that allows property developers to book sales only when the project is complete. In the present real estate market where the developers are already struggling to make ends meet, this new rule will push their income statement even further down. The government has decided to allow the developers to follow the percent completion method, whereby the developers record revenue as they build the property, thereby showing a much healthier income statement.
Though the Indian government like many other country governments is trying to merge their rules to the IFRS, this departure from the international standards will definitely come as a relief for the local real estate organizations, especially in trying times like these.
