What is a Closing Entry?

Project settlement refers to the economic documents for the construction company to clear the project price to the construction unit (owner) in accordance with the contract and the amount of completed projects. The project construction period is long and the amount of capital consumed is large. In order for the construction and installation enterprises to compensate for the funds consumed in construction in a timely manner, it is necessary to perform intermediate settlement (progression settlement) and year-end settlement of the project price. Completion settlement. In the accounting account setting, the project settlement is the accounting account dedicated to the construction contractor. Engineering settlement is a very important task in the contracting of engineering projects.

Project Settlement

Project settlement basis

1. National laws, regulations, rules and regulations and related judicial interpretations;

2. Project construction pricing standards, pricing methods, relevant regulations and relevant explanations issued by the State Council's construction administrative department and the provinces, autonomous regions, municipalities and relevant departments;

3. The contractor's contract, professional subcontract and supplementary contract, and related materials and equipment procurement contracts;

4. Bidding documents, including bid and answer documents, bid commitments, winning bids and their contents;

5. Project completion drawings or construction drawings, review records of construction drawings, approved construction organization design, design changes, engineering negotiation and relevant meeting minutes;

6. Approved start-up and completion reports or suspension and resumption reports;

7. Valuation specifications for construction project bill of quantities or project budget quotas, cost quotas and price information, price adjustment regulations, etc.

8. Project budget;

9. Relevant materials affecting project cost;

10. Fixed base price of installation project;

11. Settlement preparation commission contract.

The engineering settlement methods adopted in China are as follows: (1) Monthly settlement

The method of advance at the end of ten or mid-month, settlement at the end of the month, and liquidation after completion is implemented. Cross-year

(1) Advance receipt of advance payment

The amount of advance payment received by the construction unit from the construction unit depends on factors such as the proportion of major materials (including purchased components) in the contract cost, the material reserve period and the construction period. The amount of materials received in advance can be calculated as follows:

[Example 1] A residential project whose annual plan is completed

During the construction process, the construction enterprise calculates various expenses according to the number of projects completed monthly (or image progress, or control interface, etc.), and pays the construction unit (owner) the progress payment of the project (ie, intermediate settlement).

Taking monthly settlement as an example, the current intermediate settlement method is that the construction enterprise submits an advance payment bill to the unit at the end of the month or mid-month, advances the construction fund for the tenth or half month, and then submits the settlement bill for the construction fund and the completed account Monthly report of the project, the price of the project in that month is collected and settled through the bank. The settlement is made on a monthly basis, and the completed projects on the site must be counted one by one. After the information is submitted, the supervision engineer and the construction unit will be reviewed for visas. In order to simplify the formalities, the monthly statement of statistical progress submitted by the construction enterprise should be used as a voucher for drawing project money, which is usually called the project progress money.

The payment steps of the project progress payment are:

Completion settlement refers to the economic and technical documents for settlement of the final project price to the construction unit (owner) after the completion, acceptance, and delivery of a unit project or construction installation project in accordance with the contract.

The "Construction Contracts for Construction Projects (Model Text)" provides detailed provisions for settlement settlement:

I. The accumulative amount of the accounting firm (construction contractor) to the owner in accordance with the construction contract.

2. Detailed accounting shall be carried out in accordance with the construction contract.

3. When the enterprise handles the settlement of the project price to the owner, it debits the "accounts receivable" and other subjects based on the amount that should be settled, and credits the undergraduate subjects.

When the contract is completed, the balance of the subject is hedged with the "construction" subject of the relevant construction contract, the subject is debited, and the "construction" subject is credited.

4. The credit balance at the end of the course reflects the cumulative amount of settlement for the construction contracts that have not yet been completed.

Engineering settlement is a very important task in the contracting of engineering projects, which is mainly manifested in the following aspects:

(1) Project settlement is the main indicator of project progress. In the construction process, one of the basis of project settlement is to settle according to the completed project. According to the ratio of the cumulative settled project price to the total contract price, it can approximately reflect the progress of the project;

(2) Project settlement is an important part of accelerating capital turnover. The construction unit shall settle the project funds as soon as possible, which is conducive to repaying debts, facilitating return of funds and reducing internal operating costs. Improve the efficiency of fund utilization by accelerating capital turnover;

(3) Project settlement is an important indicator for assessing economic benefits. For the construction unit, only the full settlement of the project funds means that the operating risk is avoided, and the construction unit can obtain corresponding profits, thereby achieving good economic benefits.