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Capitalisation of asset
What should be the accounting of an asset for which the payment is made, asset is delievered but not put to use, should it be lying in advance made to vendor or should it be lying in capital work in progress.
Specifically, a premises is bought on which interior is to be done to make it fit for use, till than that premises should be capital work in progress of advance made for procurment of asset
Please quote relevant text of the AS and laws
Replies (2)
How about an Asset for which the advance is given, asset is delivered but not installed, would the said amount be lying under advance given to capital work in progress. This is specifically for an asset which is not installed for substantial period before the cut of date (i.e 31st March(
The said asset is not ready for the intended use as interior is still is progress. So, it does not meet the criteria of ready for use. Hence, it will be shown as CWIP in books.
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