Capitalization of Building WIP

[sjehanzeb]

Our Organization is in progress of adding another building for its office space. Though the building is in construction phase the partially completed area of the building is in use

1. The construction is in progress and hopefully be completed in April but the project completion certificate along with the final bill for the project will be available in September (after detail checking).

2. The construction is 90% complete in June. The partially completed area in under use

The financial year ends on May

Should we capitalize the asset on partial amount in May/June to start taking depreciation.

[Sh.Mohsin]

Since the final bill has not been progressed and completion certificate is also not available.
Due to this, the cost can not be measured reliabily.
Asset can not be capitalized.

[[email protected]]

IAS-11 is only applicable to Construction industries. That is, whose normal trading activity is to construct and earn. If this business of construction then when amount cannot be measured reliably then amount can be capitalised to recoverable amount.

This asset will be dealt under IAS-16'Property, Plant and Equipment'