Scrapping of material brought for CWIP

This query is : Resolved

Deepak Agrawal (Querist)
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08 March 2011 Hi

We brought some steel plates and pipes for construction of our building. Its is under CWIP (i.e. Fixed Assets)

Now there was some scrap generated out of above materials which we purchased for construction of fixed assets.

Now i want to know whether this scrap income of bought for assets should be reduced from cost of CWIP or it should be shown as scrap income in Profit and Loss A/c

Please send link / document reference also, if possible

Kiran Daftary

Kiran Daftary (Expert)
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09 March 2011
In my opinion, proceeds of realisation of scrap value needs to be reduced from the cost of the related Asset.