Capitalization of captila works in progress

This query is : Resolved

Bipin.M.Patel

Bipin.M.Patel (Querist)
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01 June 2012
When a CWIP has to be capitalised as fixed asset,
when it is put to use or ready to use ?

Is it written anywhere in our AS or any where else?
Is there any guidelines for this ?

According to me it should be capitalised when it is ready to use, but I don't have any proof to stand my opinion.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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01 June 2012 Asset capitalisation date and put in to use date can be different. Asset put in to use date relevant only for calculating the depreciation. CWIP can be capitalise as fixed asset once the asset ready for working condition. based on the completion certificate. calculation of depreciation can be considered as asset put in to use date.