Real Estate
Provision for Post-Handover Snagging
Accruing the estimated cost of defect repairs expected after handing units over to buyers.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Warranty & Snagging Expense | Expense (+) | 50,000.00 | - |
| Provision for Snagging (Liability) | Liability (+) | - | 50,000.00 |
💡 Accountant's Note
Prudence requires recognizing the cost of defects in the same period as the related handover revenue. Based on historical data, developers estimate a percentage of revenue as the expected snagging cost.
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