construction

Which of the following is NOT a government incentive for reviving abandoned construction projects?

• Tax Incentives for Rescuing Developers

• Free land grants for developers of abandoned projects

• Stamp duty exemption for buyers of abandoned housing projects extended

• Special Financing Guarantee

When does the business of a construction contract commence?

i) The date the contract is secured, a letter of award is offered, or possession of the site is obtained

ii) The commencement of an activity that is part of a series of activities in the construction contract business

iii) Any other date the Director General of Inland Revenue considers appropriate and reasonable

• i and ii

• i and iii

• ii and iii

• All of above

What method is used to recognize income from construction contracts based on the progress of the work? 

• Cash basis method

• Percentage of completion method

• Completed contract method

• Cost recovery method

A construction contract has a total price of RM 1,200,000. The costs incurred so far are RM 600,000, and the estimated total cost is RM 1,000,000. If the estimated profit is RM 200,000, what is the percentage of completion?

• 50%

• 75%

• 60%

• 80%

What is meant by 'Defect Liability'?

• Compensation for late delivery of the project

• Repair costs incurred after project completion

• Additional tax after the project is completed

• Cost of construction materials

For completion contracts, the action of the ‘excess shall be taken as gross income for the final year basis’ is adopted in which of the following situations?

• Actual GP = Estimated GP

• 1. Actual GP > Estimated GP

• 1. Actual GP < Estimated GP

• Actual Loss

Which of the following statements about costs incurred after project completion is TRUE according to PR 2/2009?

• Defect liability costs are only deductible if there is sufficient income from the contract in the same year

• Late Ascertained Damages (LAD) can only be claimed in the year the contract is completed.

• If there is insufficient income and no election is made, defect liability can be deducted against income from other contracts or other sources.

• 1. Irrevocable election allows deduction of defect liability against the gross income of all contracts, regardless of period.

If A= Progress billings, B= Total price and C= Estimated profit

    What is the correct equation for PERCENTAGE OF COMPLETION?

• (A/B) x C

• (B-A) x C

• (A/C) x B

• (A-B) x C