Treatment of WIP
This query is : Resolved
10 July 2009
Hi...
one of the our construction company has spent around Rs 40 lakh for one site till 31/3/09 and yet no bill has been raised for the same so i think that the exps will be treated as WIP. I would like to know that how to give tratment of this exps in the books of Accounts i mean i should first includ the exps in direct exps and than create WIP on the credit side of P&L OR i directly debit WIP A/c by crediting the party...
Pls help me out....
one of the our construction company has spent around Rs 40 lakh for one site till 31/3/09 and yet no bill has been raised for the same so i think that the exps will be treated as WIP. I would like to know that how to give tratment of this exps in the books of Accounts i mean i should first includ the exps in direct exps and than create WIP on the credit side of P&L OR i directly debit WIP A/c by crediting the party...
Pls help me out....
CA Tilak Raj Sharma
(Expert)
10 July 2009
Just do it as you first mentioned above by debiting to the direct exp. But note that you need to separate this project exp. from the other one.
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