capital work in progress

 wat is capital work in progress.?

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WHEN A CAPITAL ASSET TAKES TIME TO GET CONSTRUCTED LONGER THAN ONE FINANCIAL YR.........THEREVENUE AMOIUNTS WHICH ARE SPENT FOR ITS CONSTRUCTIOIN R NOT DEBITED TO PROFIT AND LOSS ACCOUNT BUT INSTEAD DEBITED IN AN ACCOUNT CALLED 'CAPITAL WORK IN PROGRESS' .................IN THE YR OF THE ASSET GOT COMPLETED......THIS ACCOUNT BALACNE IS TRANSFERRED TO THE RELEVANT ASSET ACCOUNT.......................FOR EXAMPLE......

DURING a particular yr, COMPANY SPENT AMOUNT on material, labour, etc..........all this amount will not be charged to profit and loss account instead debited to capital work in progress..........and in the yr or compeletion, the balance will be tranafered to the asset account.........

 

So at the end of the financial year, at the time of preparing the financial statements,  where should we show the capital work in progress ???in balance sheet??

Obviously, capitalised amount would be representing an asset and thus shown under balance sheet

YES..iT SHALL BE SHOWN IN THE BALANCE SHEET..........

where u will shown the aseet determines the tax amt and the profitability for that particular year.

asset can be shown in income under house propert, or inder business income or under capital gain.

 

where u will shown the asset determines the tax amt and the profitability for that particular year.

asset can be shown in income under house property, or inder business income or under capital gain.

accordingly account the fixed asset in books.

 

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