What is capital work in progress?

Answer 1

Capital WIP is referred to as Assets under Construction and are represented by a specific Asset class. It is an asset on the balance sheet that is not considered to be a final product, but must still be accounted for because funds have been invested toward its production. It is thus a work that has not been completed but has already incurred a capital investment Usually depreciation is not charged on Capital WIP. Following are some examples of capital WIP:

- A machinery under installation

- A building under construction

Answer 2

Capital (amount) invested in fixed assets (Building or Machines), but whereas the work (installation or in transit or erection) of the said fixed asset has not been completed and the said fixed asset is not yet ready for use/ production by the company. This is usually recorded as an asset (under the head Capital Work in process) on the balance sheet. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Capital Work in progress indicates any fixed asset that is not considered to be ready for use. It is accounted under the head (name) Capital-work in process, as funds have been invested toward its installation.