NirmaanOne Help
ConceptReviewed 2026-09-29

Rehab units as non-cash consideration

In a redevelopment the flats handed to society members are the price paid for the development rights; with the policy toggle on, the fair value of those rights is booked as land against a contract liability on the agreement date, and each member's offer earns its entitled-area share of that value as revenue when its allotted units are handed over.

Rehab units as non-cash consideration

In a Mumbai redevelopment the society does not pay the developer in money: it gives up its land and development rights, and in return each member gets a new flat. Accountants call those flats non-cash consideration. The developer receives an asset (the rights) on the day the development agreement is signed, and delivers its side (the rehab flats) years later. With the policy toggle on, NirmaanOne books the fair value of the rights when they are received and recognises that value as revenue, member by member, as their new units are handed over.

How it works in NirmaanOne

Where it is set

Two places, both needed:

  1. On the promoter's books, tab Revenue policy, section Judgement areas, toggle Rehab units as revenue (non-cash consideration) (off by default; the Approve permission on Revenue Recognition). Its description: "Redevelopment: the units handed to society members are revenue for the development rights received, at the project's fair value."
  2. On the project (a Redevelopment project only), Edit project or the wizard's Land & RERA step, section Development agreement (the Edit permission on Projects): Development agreement date ("When the rights were received. Used only when the books' revenue policy treats rehab units as non-cash consideration.") and Fair value of the development rights (optional) in ₹ ("The CA's fair value of the rehab consideration: Dr 1600 / Cr 2115 on the agreement date, revenue (4140) as each member's units are handed over.").

Nothing happens until both the toggle is on and the project has a fair value.

Receiving the rights

Every revenue run whose period end is on or after the Development agreement date brings the balance of Contract Liability - Rehab Consideration (2115) for the project up to the fair value: the first such run posts the "development rights received" journal, Dr Land and Development Rights (1600) / Cr 2115 for the whole fair value; later runs post only a change in the fair value. Before the agreement date the target is zero.

Each member's share

Every live member offer (Issued, Accepted or Signed) on the project gets a line in the run, and its transaction price gains a component called REHAB_UNITS:

  • share = the offer's entitled area (the sum of Entitled area over its allotted units) ÷ the entitled area of every live offer on the project;
  • price = fair value × share, rounded half-up to the paise;
  • its contract liability ledger is 2115 and its revenue ledger is Revenue - Rehab Units (4140);
  • it counts as billed once the agreement date is on or before the period end, since the consideration was received on that day.

The offer's tenant charges treated With the unit (legal, other, differential area) stay in the same line as before; benefits the developer pays are never part of it.

When it is recognised

Under Point in time a member's offer follows its allotted units: each unit must have an active booking (the allottee's own purchase booking), and the offer reaches 100% only when every one of those bookings has passed the policy's trigger, with the OC in place when required; the line's date is the last handover. Until then the line notes why, for example "Unit B-704: Waiting for: possession handed over" or "An allotted unit has no booking yet". Under an over-time method the offer takes the progress of the slowest tower its units are in. The revenue journal debits 2115 and credits 4140 by the recognised share, exactly as a sale booking debits 2100.

Cost of sales on the offer

With the toggle on and a fair value set, the allotted rehab units join the pool over which the project's cost is shared, whatever their designation, and the member's offer carries the cost of those units (allotted area ÷ pool area × the scope's cost, at the offer's progress). The allottee's own booking on that unit then carries no cost, so the cost is charged once. With the toggle off the rehab flats are simply the price of the land: the consideration is not revenue and no offer carries cost of sales.

Why

Ind AS 115 measures non-cash consideration at fair value, and the developer plainly performs when it hands the member a finished flat. Booking the rights at the agreement date and the revenue at handover shows the redevelopment's true turnover and margin, instead of a project whose land cost appears from nowhere and whose rehab wing earns nothing. It is a judgement the CA takes, which is why it ships off.

Example

Sea Breeze Residency redevelops Sagar Darshan CHS. The CA sets the toggle on and, on the project, Development agreement date 12 May 2026 and Fair value of the development rights (optional) ₹36,00,00,000.00. The 40 live member offers entitle 30,000 sq ft in all; Mrs Meena Mehta's offer allots unit B-704 with an Entitled area of 810 sq ft; B-704 also measures 810 sq ft Carpet area (Mofa), the project's chargeable area for buyers, as do the allotted units in total (30,000 sq ft). Because the rights are now part of the project's cost, the CA also adds a budget row from 12 May 2026: construction ₹42,00,00,000.00, land, development rights and rehab ₹48,00,00,000.00, total ₹90,00,00,000.00; the cost pool is the 48,000 sq ft of saleable units plus the 30,000 sq ft of allotted rehab units.

  1. Run to 31 May 2026. The project's "development rights received" journal: Dr Land and Development Rights ₹36,00,00,000.00 / Cr Contract Liability - Rehab Consideration ₹36,00,00,000.00. Mrs Mehta's line: share = 810 ÷ 30,000 = 0.027; price = ₹36,00,00,000.00 × 0.027 = ₹97,20,000.00; Billed ₹97,20,000.00 (the rights are received), Progress 0% ("An allotted unit has no booking yet"), Liability ₹97,20,000.00. Nothing else is posted for her: the liability already sits in 2115. The Contract balances report shows the ₹36 crore under Contract liability as billed in the period.
  2. Her allottee purchase booking is created; B-704 is handed over on 20 January 2029 (the tower's OC is dated 5 December 2028). Run to 31 January 2029: her line goes to 100% ("since 20 Jan 2029"), This run ₹97,20,000.00. Journal: Dr 2115 ₹97,20,000.00 / Cr Revenue - Rehab Units ₹97,20,000.00.
  3. Cost of sales on the same line: share of the pool = 810 ÷ 78,000; cost total = ₹90,00,00,000.00 × 810 ÷ 78,000 = ₹93,46,153.85; at 100% the work-in-progress part is ₹93,46,153.85 × 42 ÷ 90 = ₹43,61,538.46 and the land part ₹49,84,615.39. Journal: Dr Cost of Sales - Units ₹93,46,153.85 / Cr Construction Work-in-Progress ₹43,61,538.46 / Cr Land and Development Rights ₹49,84,615.39. The margin on her flat is ₹97,20,000.00 − ₹93,46,153.85 = ₹3,73,846.15.

Had the CA revised the fair value on the project to ₹38,00,00,000.00 in April 2027, the run to 30 April 2027 would post the ₹2,00,00,000.00 difference to 1600 / 2115 and every live offer's price would move with its share (Mrs Mehta's to ₹1,02,60,000.00).

Where you see it

  • Revenue policy: the toggle Rehab units as revenue (non-cash consideration).
  • Edit project: Development agreement date and Fair value of the development rights (optional) under Development agreement.
  • Revenue run: the "Member offer" lines, their Price, Liability, Cost of sales, and the "development rights received" journals.
  • Society & Tenants and Allottee: the offers, their allotted units and entitled areas.
  • Booking overview: the Possession card of the allottee's booking, whose handover releases the revenue.
  • Contract balances: 2115 in the Contract liability card.
  • Remaining obligation: a member offer counts here once a posted run has given it a line.

Related

  • Revenue policyScreen

    The CA's effective-dated choices on how the books recognise sale revenue and the costs that go with it: framework, method, possession trigger, OC rule, cost treatments and judgement areas.

  • Edit projectScreen

    Change a project's facts on one page: basics, site address, land survey details and expected possession, and, on a redevelopment, the development agreement date and the fair value of the development rights. The settings the project inherits from the organization live on its Settings tab.

  • Revenue runScreen

    One period close: what each booking and member offer recognises, the journals and cost moves it posts, the subjects it left out, and the actions to recompute, post, reverse or delete it.

  • Society & TenantsScreen

    On a redevelopment project, link the society being redeveloped, keep its members and the project's landowners and PAP tenants, and give each of them an offer that allots new units and sets the benefits the developer pays.

  • AllotteeScreen

    One society member, landowner or PAP tenant on a page: who they are, what they hold today, their co-owners, their offers on each project, the letters and files filed for them, their bank accounts and parking.

  • Contract balancesScreen

    The Ind AS 115 contract-balances disclosure per project over a period: contract liability, contract asset and contract acquisition costs rolled forward from the ledger, with the revenue recognised in the period and how much of it came out of the opening liability.

  • Remaining obligationScreen

    The Ind AS 115 disclosure of revenue still to come from what is already booked: each live booking and member offer's price less what the posted revenue runs have recognised, per project, banded by the financial year of the project's expected possession.

  • Booking overviewScreen

    A booking's home page: the applicant and unit, parking, dates, money summary, termsheet status and possession, with the buttons to edit the booking, see its history, jump to the opportunity or cancel it.

  • Revenue recognition: policy, point in time vs over time, and revenue runsConcept

    Each set of books carries an effective-dated revenue policy (framework, method, possession trigger, cost and brokerage treatments, judgement areas) chosen by the CA; a revenue run is the period close that computes every booking's and member offer's progress under it, recognises the catch-up revenue, cost of sales and brokerage, and posts the journals.

  • Contract liability, contract asset and the transaction priceConcept

    A booking's transaction price is the sum of its charges treated "With the unit"; while revenue is deferred, demands for those charges are credited to a contract liability (billed ahead of revenue), a revenue run debits it as revenue is recognised, and revenue recognised ahead of billing sits in the contract asset.

  • Cost of sales, cost budgets and inventory transferConcept

    Each revenue run moves the period's construction, rehab and borrowing cost from the expense ledgers into work-in-progress and land inventory, then charges every booking a share of the project's cost (its budget, else the cost inventoried so far) in step with its revenue progress, so revenue and its cost land in the same period.

  • Allottees: society members, landowners and PAP tenantsConcept

    The people who receive new units through an offer on a redevelopment: society members (under the society, with an existing flat and consent), landowners and PAP tenants (under the project); each is a contact with co-owners, one live offer per project, documents, bank accounts and parking.

  • Entitlement: existing carpet, entitled area, uplift, extra area and the splitConcept

    The area figures on an allottee's offer: the carpet they hold today, the area they are entitled to (typed, or filled from the project's uplift guidance or the allotted units), the extra area the allotted units give beyond it, and how the entitlement is split across the units to fix what each one charges for.

  • Member offer (term sheet): benefits and charges, never nettedConcept

    The one live offer an allottee has on a project: the area they hold and are entitled to, the new units allotted, and the money on both sides, benefits the developer pays and charges the member pays, each with its own schedule and never set off against the other.

  • Allottee purchasesConcept

    How an allottee buys the units their offer allots: one purchase per allotted unit, priced only on the area beyond their entitlement, through the same estimate, payment plan, approval and booking chain as any buyer, with the unit staying Allotted throughout.