Sale of cwip

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2013 Hi,

As we all know after completion of Project we transfer cost from CWIP to Respective Asset head.

what if before completion of that project I sale it from CWIP?

will it consider as Normal Sale?
or
Sale of Fixed Assets

Can anyone tell me exact accounting treatment for this?

Thank you.

RAJU S NARAYANAN

RAJU S NARAYANAN (Expert)
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25 April 2013 even in this case, you have to transfer from CWIP to asset account where the name of asset will be different.

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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19 May 2013 You cannot sale CWIP it can be transferred. If your are transferring CWIP then total consideration minus the cost is to be treated as business income. But after completion of the project you are selling this then it is always better to capitalize CWIP to various assets and then sale the assets and not CWIP

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