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Notes To Capital Work-In-progress

Capital work in progress includes pre-operative expenses like salaries, rent, insurance, interest payments, raw materials, and power costs incurred during construction projects. It also includes the costs of assets under construction, advances paid for capital goods, construction materials, and interest capitalized on loans taken for capital projects. Several notes provide details of expenditures allocated to specific projects, expenditures treated as deferred until commercial production begins, interest capitalized, and commitments for sanctioned capital expenditures.

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Jitendra Vernekar
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943 views

Notes To Capital Work-In-progress

Capital work in progress includes pre-operative expenses like salaries, rent, insurance, interest payments, raw materials, and power costs incurred during construction projects. It also includes the costs of assets under construction, advances paid for capital goods, construction materials, and interest capitalized on loans taken for capital projects. Several notes provide details of expenditures allocated to specific projects, expenditures treated as deferred until commercial production begins, interest capitalized, and commitments for sanctioned capital expenditures.

Uploaded by

Jitendra Vernekar
Copyright
© © All Rights Reserved
Available Formats
Download as TXT, PDF, TXT or read online on Scribd
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Capital work in Progress

Examples of notes to accounts relating to capital work in progress are given


below :
1.

Cost of Fixed Assets and Capital Work in Progress includes the


following pre-operative expenses.
31-3-______
(Rs. Lacs)

31-3-______
(Rs. Lacs)

Opening Stock of goods produced

___________

___________

Salary and Taxes.

___________

___________

Contribution to Provident and other


funds.

___________

___________

Rent (Net)

___________

___________

Rates and Taxes.

___________

___________

Insurance

___________

___________

- Audit Fees.

___________

___________

- Certification Work

___________

___________

Interest on Term Loans & Debentures.

___________

___________

Interest on others

___________

___________

Miscellaneous Expenses

___________

___________

Depreciation

___________

___________

Raw Materials consumed

___________

___________

Power and Fuel

___________

___________

Excise Duty

___________

___________

Legal and Professional Fees

___________

___________

___________

___________

Less : Sale of Cement Manufacturing during trail run

___________

___________

Closing Stock of Goods Purchased


during trial run

___________

___________

Material Produced in Trial Run

___________

___________

Payment to Branch Auditors :

Total

2.

3.

Capital Work-in-Progress includes Rs. _______ for Delhi Project, the


details of which are as follows :
(a)

Capital Work-in-Progress (after adjustment of Rs. ____________


being net increase due to change in the rate of exchange of
the rupee and payment to Auditors - other matters consultancy services Rs. _________).

(b)

Capital Goods in transit

(c)

Advances for Capital Goods - Unsecured considered good.

(d)

Stock of construction materials - value at cost

(e)

Interest on Loans

Addition to Fixed Assets and Capital Work in Progress include


expenditure on new industrial units as follows :
Year ended
31-3-_____
(Rs. Lacs)

Years ended
31-3-______
(Rs. Lacs)

(i)

Repairs to Buildings

___________

___________

(ii)

Salaries & Wages

___________

___________

(iii)

Contribution to Provident Fund ___________

___________

(iv)

Employee Welfare Expenses

___________

___________

(v)

Insurance

___________

___________

(vi)

Rent

___________

___________

(vii)

Rates & Taxes

___________

___________

(viii) Miscellaneous Expenses

___________

___________

(ix)

___________

___________

Interest
Total

--------------------------___________
___________
---------------------------

4.

Cost of Capital Work-in-Progress include pre-operative expenses of


Rs. _________ lacs consisting of Stores & Spare Parts consumed
Rs. __________ lacs, Power & Water charges Rs. ________ lacs, Salaries
Rs. _____________ lacks, Contribution to Provident & other Fund
Rs. ________ lacs, employees Welfare expenses Rs. _________ lacs, Rent
Rs. _____________lacs, Rates & Taxes Rs. ____________ lacs, Insurance
Rs. _________ lacs, and Miscellaneous expenses Rs. _________ lacs.

5.

Capital Work in Progress includes :


Project Expenses pending Allocations as under :

(i)

Salaries & Wages (Rs.

(ii)

Contribution to Provident & Other Funds (Rs.

(iii)

Staff Welfare Expenses (Rs.

(iv)

Interest on Term Loan (Rs.

(v)

Depreciation (Rs.

(vi)

Miscellaneous Expense

)
(Rs.

6.

As commercial production has not been commenced as at the date of this


balance sheet at the Delhi Plant, certain expenditure incurred by the
company as detailed in Schedule ______ which canot be regarded as part
of the incidental cost of construction of buildings and plant and
machinery, has been treated as deferred revenue expenditure. It is
proposed that such expenditure will be written off to the future
profit or loss account starting from the year in which commercial
production commences. These expenses have been identified as relatable
to the work to be undertaken after the company commences commercial
production and includes certain expenses allocated to deferred revenue
expenditure on the basis of estimates made by management.

7.

The Company started trial runs and trial production at its _____ Plant
on _______ Commercial production has not been commenced as at the date
of Balance Sheet. The expenditure incurred on the Project during the
period from ________ to ________ has been included in Schedule _______
`Pre-operative and Trial Production expenditure allocated to Fixed
Assets and Capital Work in Progress'. The preoperative and trial
production expenditure has been allocated to Buildings, Plant and
Machinery, Capital Work in Progress in the ratio of direct costs.

8.

Interest amounting to Rs. _____________ on loans for capital work in


progress has been capitalised during the year.

9.

Commitments against capital expenditure sanctioned by the Board up to


31st March, ______ in so far as they have not been provided for in the
account amounted to Rs. _________.

10.

Capital work in progress includes the entire interest of Rs. _________


lakhs (icluding Rs. __________ lakhs for the year) on deferred payment
credits availed under ICICI re-discounting scheme for purchase of
machineries.
*******

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