Work in progress

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kula chandrama pradhan (Querist)

24 June 2017 What is the difference between Capital work-in-progress and WIP as an inventory. AS-2 is not applicable on WIP arising under construction contracts. Also, Inventory valuation is not prescribed under AS-7. So, does it mean that, WIP inventory doesn't arise under construction contract. If that is not the case, then how do we value inventory arising construction contract ? Please if someone could elucidate with a good example .

Ajay Darak

Ajay Darak (Expert)

24 June 2017 Capital work-in progress to be dealt in accordance with AS-10 or INDAS-16 PPE
WIP is also in inventory valuation as per AS-2 or IND AS-2
WIP on account of construction contracts as per AS-7 or IND AS-11 or Guidance note on recognition of revenue on real estate transactions.
You can get numerous examples by referring above.

kula chandrama pradhan

kula chandrama pradhan (Querist)

24 June 2017 Dear Ajay, Even I am aware of the coverage of the Relevant accounting standard to the applicable cases as you have mentioned. But, i think you didn't get my question correctly. Kindly Re-read, if you wish to. Anyways, Thank you for trying to ease my problem. cheers :)

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