Asset Capitalization

Asset Capitalization builds one new asset out of things that are already in the books: stock items drawn from a warehouse, service bills parked in Capital Work in Progress, and even other assets being combined. A completed renovation or an assembled machine is the typical case. On submit it credits Stock In Hand for the items consumed, credits CWIP or the service expense for the bills, and debits the fixed asset account of the target Asset Category; it then creates the new Asset record. Once submitted it locks, so cancel and amend to correct it. Without it, project costs would stay scattered across stock and CWIP and never start depreciating.

New asset cost = Value of stock items consumed + service costs capitalised + book value of assets merged

1. 01Go to Assets > Asset Capitalization > New and set Entry Type to Capitalization.
2. 02Pick the target item (Is Fixed Asset) and its Asset Category, for example Buildings.
3. 03In Stock Items add the materials and warehouse; in Service Items add the CWIP bills.
4. 04Check the computed total asset value.
5. 05Submit. The entry below posts and a new Asset is created in draft.
6. 06Open the new Asset, set the available for use date and submit it.

Create under Assets > Asset Capitalization when a project completes. Submitted capitalizations lock.

Capitalise Rs 5,00,000 of CWIP and Rs 50,000 of stock into one Buildings asset.