What is the final account in construction?
The final account is the conclusion of the contract sum (including all necessary adjustments) and signifies the agreed amount that the employer will pay the contractor. It includes any works that are paid to the contractor through the main contract.
What is included in the final account?
The term “final accounts” includes the trading account, the profit and loss account, and the balance sheet.
What is a final statement JCT?
What is the Final Certificate under the JCT contract? The Final Certificate is a document that states the Contract Sum as adjusted, the amount of prior interim payments, and thus the final payment to be made; and is issued under the JCT contract after the later of: 1. The end of the rectification period.
What financial details are included in the final certificate?
Final account
- Variations.
- Fluctuations.
- Prime cost sums.
- Provisional sums.
- Payments to nominated sub-contractors or nominated suppliers.
- Statutory fees.
- Payments relating to the opening-up and testing of the works.
- Loss and expense.
How do you write a final account?
Final accounts can be calculated as follows:
- Make a list of trial balance items and adjustments.
- Record debit items on expense side of P and L account or assets side in balance sheet.
- Record credit items on the income side of trading P and L account or liabilities side of balance sheet.
What are the types of final account?
Most companies and corporations across the world use primarily 3 types of final accounts:
- Trading account.
- Profit and loss account.
- Balance sheet.
Who prepares final account?
Who prepares a final account? Quantity surveyors generally prepare final accounts, in the manner that is best suited to the particular project, with the original contract sum as the starting point.
What is final account statement?
In construction contracts, a final account is an agreed statement concerning the amount of money to be paid at the end of a building contract by the employer to the contractor.
Who prepares the final account?
What is the main objective of final accounts?
What are the main objectives of final accounts? To determine gross profit and net profit of the business during the year. To present true financial position of the business on a given date. To make effective control on financial activities of the business.
What is final account answer in one sentence?
Final accounts are those accounts which are prepared at the end of the accounting period in order to give a report on the profitability and financial position of the business. These include two statements, i.e. Income statement (Trading and Profit & Loss Account) and Statement of Financial Position (Balance Sheet).
What is a final account in a construction contract?
A Final Account in construction contracts is the agreed statement of the amount of money to be paid at the end of a building contract by the employer to the contractor. A final account brings about a sense of finality to the negotiations leading up to the agreement of the Final Account between the parties to the contract.
What do you need to know about final account?
Practical consideration such as advising on the structure of a final account and how to prepare a statement for final account will also be considered. What is a final account? The final account is the conclusion of the contract sum (including all necessary adjustments) and signifies the agreed amount that the employer will pay the contractor.
How are variations instructed in the final account?
In terms of the final account, the only contractually entitled change to the contract sum will be for variations, which have been formally instructed under the contract. There are different procedures in terms of instructing variations depending on the contract type but the principles remain the same.
Is the contractor entitled to fluctuations after the completion date?
The contractor is usually not entitled to fluctuations after the completion date. As with all other changes to the contract sum any fluctuations should be communicated by the monthly cost report to the employer at regular intervals. The final account should be the formalization of fluctuation calculations under the contract.