Question
During the execution of a construction contract, the following events occurred: · Materials worth ₹5 lakh were damaged due to heavy rainfall and became unusable. · After the heavy rainfall, the client requested to construct an extra parking shed which was not part of the original contract. The contractor raised a claim of ₹25 lakh for this additional work. How should these items be treated in contract costing?
During the execution of a construction contract, the following events occurred: · Materials worth ₹5 lakh were damaged due to heavy rainfall and became unusable. · After the heavy rainfall, the client requested to construct an extra parking shed which was not part of the original contract. The contractor raised a claim of ₹25 lakh for this additional work. How should these items be treated in contract costing?
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