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in case of construction contract we charge to cost of sales based on % completion…but the plant machinery, being used for that construction may have different value of depreciation to be charged based on its time apportionment . As we applying the % on total cost ….maybe part of depreciation comes to cost of sales is less or more than they had actually been if accounted for separately. so because as we charging based on % comp. will we do some adjustment or whatever being set by cost of sales thats it no extra dep. to be charged.
Hi,
I’m sorry but I don’t fully understand the question. Could you elaborate on it a bit more, or even identify where you have got the question from?
Thanks