Treatment of WIP

This query is : Resolved

prakash (Querist)
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10 July 2009 Hi...
one of the our construction company has spent around Rs 40 lakh for one site till 31/3/09 and yet no bill has been raised for the same so i think that the exps will be treated as WIP. I would like to know that how to give tratment of this exps in the books of Accounts i mean i should first includ the exps in direct exps and than create WIP on the credit side of P&L OR i directly debit WIP A/c by crediting the party...

Pls help me out....

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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10 July 2009 Just do it as you first mentioned above by debiting to the direct exp. But note that you need to separate this project exp. from the other one.