Work in progress

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kula chandrama pradhan (Querist)
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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)
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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)
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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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