Capital work-in-progress is stated at cost and not depreciated. Depreciation on capital work-in-progress commences when the assets are ready for their intended use.
Note: This is usually disclosed as an asset category of property, plant and equipment. The balance of unrecognized amount of capital work-in-progress compared to the contracted full price is disclosed as capital commitment
3 thoughts on “Sample Disclosure – Accounting Policy On Capital Work-in-progress (27 October 2009)”
what is the accounting entry for capital work-in-progress cost and how does it show in financial report?
It’s not complicated. Capital work-in-progress is an asset. The double entry is Dr. Capital work-in-progress (asset) and Cr. Bank/creditor (cash outflow or payable).