Monorail projects
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
16 January 2017
our is government organisation we have incurred Rs.XXX crores till march 2016 on monorail project .The first phase of the project was completed and became operational in february 2014. projetct has earned revenue Rs.XXX crores during the year 2014-15and rs.XXX in 2015-16.The contract for this work is given to Single contractor. As per CAg auditor ,since the firest phase is completed and become operational and started to earn revenu the same should be trated as fixed assets and not work in progress .so depreciaiton should also be charged on it . please guide how can we prove our point unless full work is completed we can not capitalise it. which accouning standarad is applicable here to prove our point
16 January 2017
CAG is right, you have to capitalize the expenses incurred on completion of Phase one of the project.
16 January 2017
You can refer IAS 16 Property plant and equipment to get a better insight.
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