Account type: Capital Work in Progress

Account type Capital Work in Progress, or CWIP, marks the account that holds the cost of an asset still being built, installed or waiting to be put into use. When Enable Capital Work in Progress Accounting is on in Accounts Settings or on the Asset Category, a fixed asset Purchase Invoice debits Capital Work in Progress - YFF rather than the fixed asset account. Submitting the Asset with an available for use date then moves the cost out of CWIP into the fixed asset account, and depreciation starts only from that date. Leaving a finished asset in CWIP means no depreciation is charged and the balance sheet shows a project that is really equipment.

CWIP balance = Costs of unfinished assets booked - costs transferred to fixed asset accounts

1. 01Go to Accounts Setup > Accounts Settings and tick Enable Capital Work in Progress Accounting.
2. 02Go to Accounts Setup > Chart of Accounts and open Capital Work in Progress - YFF; confirm the type.
3. 03Record asset bills through Purchase Invoices; they debit CWIP.
4. 04When the asset is ready, open the draft Asset, set the available for use date and submit.
5. 05The entry below moves the cost into the fixed asset account and depreciation starts.

Set on Capital Work in Progress - YFF; submitting the Asset, or an Asset Capitalization, moves balances out of it.

A Rs 5,00,000 office renovation sits in CWIP until completion.