Advance for capex project

Abuyahya (Accountant) (33 Points)

18 December 2011  

Dears

An amount of Rs 1 crore was given to EPC contractor for a project  of 10 crore to be completed in year  2013.The amount was shown as advance to contractors in current asset. Our Internal auditor   recommends to post in Asset under construction forms part of Fixed asset.Is it correct ?????If we transfer from  current asset group liquidity ratio is affected which is breach of covennant for a financial firm lend fund to us.

Please help us