Accounting treatment of payament made for Trunky project

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Payal Desai (Querist)
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16 January 2011 Pl suggest me the accounting entry for payments made towards Lumpsum trunky project.

Say, My project is still going on and i have made payment of Rs.1 Crore on the basis of invoice received than what should be the accounting entry for this.

should it be debited under Work in progress account or should be treated as advance in view of AS 10 payment.

Thanks

Vivek Raju P

Vivek Raju P (Expert)
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16 January 2011 This is a capital advance, the amount has to be taken into CWIP on receipt of RA bills from the contractors.

After the intsallation and comissioning of the project the amount in CWIP may be capitalised under various heads of fixed assets.