ours is rice shelling company,there had been a construction going in the factory premises for which bricks , cement, tmt was purhased, the construction was in continuation stage on 31.03.2011and some of the material was unused. my query is whether the total material purchased should be entered to building WIP or only consumption should be entered and the balance to store .please advice.
14 Replies
jaganathan
(accounts executive)
(272 Points)
Replied 14 June 2011
As the purchase of materials for building construction comes under asset you can account the total purchase in asset.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 14 June 2011
YOU CAN TREAT IT AS CAPITAL WORK IN PROCESS
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 14 June 2011
MOREOVER INTHIS NO DEPRECIATION WILL BE CLAIMED AS IT IS NOT IN USE DURING THE YEAR ENDED
rachit jain
(chartered accountant )
(635 Points)
Replied 14 June 2011
only the consumed material will be capitalized unused material can not be capitalized.if the material is specifically purchased for the building then unused material is to scrapped and loss on sale of scrap(if can be sold) or total loss will be debited to P&l.
Rajnikant Vadigoppula
(CA, CS And CMA Final)
(919 Points)
Replied 14 June 2011
matrial conbsumed till date is capitalised as CAPITAL WORK IN PROGRESS under Fixed Asset
balance should be shown as stock of material in current asset.
when the material is used in next year then it can be capitalised in that year
brahma gupta
(article)
(81 Points)
Replied 15 June 2011
plz sent me revised schedule VI in Excel formet for preparation of companies` account for F.Y 2010-11
kaushal
(C.A. Student & Audit Assistant )
(44 Points)
Replied 15 June 2011
Hey Manik ...........
Only the material that you consumed in the current year should be capitalised in the head of Fixed Assets & sub head of Capital WIP and the rest of the material is not capitalised in this year so it should be shown under the head of current assets as stock.
The rest of the material is shown in the balance sheet when it is capitalised in the next year....
Regards & God Bless You.................
ANANDA D
(Article Assistant)
(61 Points)
Replied 15 June 2011
According to AS 10, whatever additions made to the building during the year (that is purchase of Materials) shall be debited to Capital Work-in-progress and should be shown in Balance sheet and Capital Work-in-Progress and no depreciation can be claimed on such Building .
Mayank
(Sr.Accountant)
(152 Points)
Replied 15 June 2011
matrial conbsumed till date is capitalised as CAPITAL WORK IN PROGRESS under Fixed Asset
balance should be shown as stock of material in current asset.
when the material is used in next year then it can be capitalised in that year
@*CS Siddharth Bumb. *
(B.Com, CA Final, CS )
(5270 Points)
Replied 18 June 2011
| Originally posted by : Rajnikant Vadigoppula | ||
 |
matrial conbsumed till date is capitalised as CAPITAL WORK IN PROGRESS under Fixed Asset balance should be shown as stock of material in current asset. when the material is used in next year then it can be capitalised in that year |
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