BMC Associates says Replied on 15th August,2026 04:14 AM

To verify the profit or loss on sale of plots of land by APQ Ltd., the auditor should ensure that the correct cost of each plot sold has been charged to the Profit & Loss Account. The auditor should: Verify the opening stock of land with the previous year's audited financial statements. Verify purchases/acquisitions of land with sale deeds, purchase agreements, registration documents, and payment records. Check the cost allocated to each plot, including directly attributable development costs such as layout, infrastructure, legal charges, etc., where applicable. Verify sales with sale agreements, conveyance deeds, receipts, bank statements, and customer ledgers. Reconcile the number and area of plots sold with the stock records and closing inventory. Calculate the profit/loss as: Sales consideration – Cost attributable to plots sold = Profit/Loss on sale Ensure that the unsold plots are valued at the appropriate lower of cost and net realisable value, as applicable to inventories. Check whether the sale proceeds and resulting profit agree with the books and have been properly disclosed. This helps the auditor establish that the profit reported on land sales is complete, accurate, and not overstated. For assistance with real-estate accounting, inventory valuation, and audit procedures, businesses can consult experienced chartered accountant firms in gurgaon, a qualified chartered accountant gurgaon, a reliable ca firm in gurgaon, or a professional ca in gurgaon.