Infrastructure / EPC Contractor Audit Checklist — Percentage of Completion
INFRASTRUCTURE / EPC CONTRACTOR AUDIT CHECKLIST
Entity: {{client_name}} · Year ended: {{period_end}}
Purpose: test percentage-of-completion revenue recognition, retention money, liquidated damages provisioning, and joint venture/consortium accounting for an EPC/infrastructure contractor.
A. Percentage-of-completion computation (Ind AS 115 — input method)
| Particulars | Amount (₹) |
|---|
| Total contract value | {{contract_value}} |
| Costs incurred to date | {{costs_incurred_to_date}} |
| Total estimated costs to complete the contract | {{total_estimated_costs}} |
| Percentage of completion (costs incurred ÷ total estimated costs) | |
| Revenue recognisable to date (% complete × contract value) | |
| Amount billed to customer to date | {{amount_billed_to_date}} |
| Contract asset (unbilled revenue) / Contract liability (billed in excess of revenue) | 0 |
B. Retention money and milestone billing
| Test | Result / Observation |
|---|
| Retention money withheld by the customer (typically 5-10% of each certified bill) is recognised as a receivable, not derecognised from contract revenue | |
| Retention receivable is discounted to present value where the retention period is long and the financing component is significant, per Ind AS 115's significant-financing-component test | |
| Bank guarantees furnished in lieu of retention are tracked against their validity and claim status | |
C. Liquidated damages (LD) provisioning
| Test | Result / Observation |
|---|
| Projects running behind the contractual schedule have an LD exposure assessment, provisioned as variable consideration (constrained to the amount highly probable not to reverse) rather than ignored until actually levied | |
| LD already levied/deducted by the customer from certified bills is correctly reflected as a reduction of contract revenue, not as a separate expense | |
| Extension-of-time (EOT) claims that would waive or reduce LD are only recognised to the extent their approval is highly probable | |
D. Joint venture / consortium accounting
| Test | Result / Observation |
|---|
| The JV/consortium arrangement has been correctly classified as a joint operation or joint venture per Ind AS 111, based on the parties' rights to assets/obligations for liabilities vs. rights to net assets | |
| Where classified as a joint operation, the entity's share of assets, liabilities, revenue and expenses (per the JV agreement's profit-sharing ratio) is recognised directly, not equity-accounted | |
| Inter-JV-partner balances (cash calls, cost-sharing) are reconciled and not left open at year-end | |
E. Conclusion
Conclusion on revenue recognition, retention, LD provisioning, and JV accounting: ____________________________________________
| Prepared by | Reviewed by | Engagement partner |
|---|
| | |
