Hi guys, i came across this term

"Accrued billings"

When reading the quarterly reports of a property developer, Global Oriental Berhad in the current assets section.

Just asking, what is the meaning of "accrued billings" used in the context of a property developer? What gives rise to "accrued billings"?

I find it weird because property developers cannot recognise unbilled sales in its financial statements but rather to recognise sales per the percentage of completion and this matched against its property development costs in its P&L.

Thanks in advance for the help.

Acrrued in accounting means something already happened, but actual full bill not yet coming.
Eg.
Your electricity bill date is 15th, and while your account date is 31st.

On 31st, you have still not yet receive the bill, but you can't take 15th bill as final, as there is still 16days of usage/bill amount needs to be accounted for in order to reflect the actual situation on 31st,
so that's where the accrued column slot in.

I don't know about the mentioned specific company account issue, but accrued generally about the dating issue of the bill.

symlife i bet?

Revenue is recognised based on percentage of completion

Percentage of completion is usually based on budgeted cost

Say, sales value is RM150m, and budgeted cost is RM100m
And u already spent RM10m
So, u can recognise revenue of 10% i.e. RM15m

But, u have only billed your customer RM10m

RM5m is accrued billing

Pink Spider, thanks for the excellent explanation. What about unbilled sales? What's the difference between unbilled sales and accrued billing? Thanks!

I think same.

Not 100% sure, I'm not property accountant

http://www.masb.org.my/index.php?option=co...-activities-pg1


Just different name for the same thing I think

This post has been edited by Pink Spider: Nov 2 2015, 12:00 PM

Unbilled sales will not be reflected in financial statements

The formula is as follows:

Unbilled sale = total sales generated by SPA signed - total revenue

Total revenue= Billed sales + accrued billing (mean unbilled portion)

Accrued billing (current asset) = Revenue - Billing , when billing less than revenue recognised based on stages of completion method

Progress billing (current liabilities) = Billing - Revenue, when billing more than revenue recognised based on stages completion method