Notional Profit is -
(a) difference between value of work certified and cost of work certified
(b) profit of contract
(c) difference between cash received and work certified
(d) difference between retention money and cash received
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a.difference between value of work certified and cost of work certified
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Notional profit is difference between value of work certified and cost of work certified. (Option a)
- Notional profit is calculated for the money accumulated in the real estate and construction industry.
- For construction, long-term contracts are granted, on which a yearly profit or loss is to be reported.
- But for the entire contract time, the overall profit obtained is calculated in terms of notional profit and is granted accordingly to the contract responsible person.
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