How to Record the Full-Cash Sale of a Ready Residential Unit with Simultaneous Revenue and COGS
Recording a completed unit sale paid in full, with revenue and cost of sales recognized at the point of sale.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Bank | Asset (+) | 850,000.00 | - |
| Property Sales Revenue | Revenue (+) | - | 850,000.00 |
| Cost of Property Sold | Expense (+) | 500,000.00 | - |
| Property Inventory | Asset (-) | - | 500,000.00 |
💡 Accountant's Note
For a ready unit sold at closing, both revenue and COGS are recognized simultaneously at the point of sale.
Practitioner & Systems Framework
💻 ERP Architecture
For completed (ready) units sold with immediate payment, the revenue recognition trigger is the same as for off-plan handovers — title transfer and key delivery. Under Jordan's Real Estate Law, the official transfer at the Lands & Survey Department is the definitive evidence of title transfer. In the same period, recognize the unit's cost from inventory as Cost of Property Sold. The gross profit margin on ready unit sales reflects the full development economics for that unit.
⚠️ Audit Flags
Revenue recognition for ready unit sales requires evidence of title transfer — the official registry document from the Lands & Survey Department. Sales recognized based on signing of a preliminary agreement (prior to official registration) may be premature. The cost of the sold unit must match the correct unit in the inventory sub-ledger — selling Unit 5B but recognizing the cost of Unit 5A creates a COGS allocation error.
📄 Required Documentation
Sale and purchase agreement, title transfer documentation (Lands & Survey Department registration certificate), cash receipt, unit cost identification from inventory sub-ledger, COGS entry matching the specific unit sold, gross profit reconciliation, and sales register.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.