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when the customer is billed
A/R Dr
Progress Billing Cr
and the difference between Construction in progress and the progress billing to date is reported as a current asset or as current liability
Progress Billing Dr
Construction in progress Cr
thank you
Progress Billing is normally occurs when there is a Contract between two parties for completion of a project over the period of time. The accounting of such transaction should be dealt by IAS11 (which will replaced by IFRS15 in the year2017). The outcome of a contract should be estimated reliably and Revenue and Cost should be recognized in proportion to the stage of completion of contract activity.
During the construction phase, when the contractor billed to the developer and the Developer agreed on the amount of progress billing. The Developer should record Contract Asset or Construction Work in Progress (CWIP) at the Asset side of its Financial Position, and record liability towards the Contractor.
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