Assets or expenses???

Ajay Singh Bhati (Manager (Accounts)) (215 Points)

16 May 2012  

Dear Members,

I am doing internal audit of our manufacturing unit in Ethiopia. The accountant here has treated expenses incurred on construction of factory building under "Administrative Expenses (Indirect Expenses)" thus the profit decreased with such amount; whereas in my opiniion it should be treated under "Construction in Progress (Fixed Assets)" and please also tell me if I treat it as "Construction in Progress (Fixed Assets)", should we charge Depreciation on such assets??? 

Kindly sugggest

Thanks and Regards

Ajay Singh