Construction in progress
 | This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages)
|
An accountancy term, construction in progress (CIP) asset or capital work in progress entry records the cost of construction work, which is not yet completed (typically, applied to capital budget items). A CIP item is not depreciated until the asset is placed in service. Normally, upon completion, a CIP item is reclassified, and the reclassified asset is capitalized and depreciated.
While costs are added to the construction in progress, related CIP account is debited with corresponding credits to accounts payable, accrued expenses, inventory, cash, and others. When the construction in progress is completed, related long-term asset account is debited and CIP account is credited.[1]
References
- ^ "What is construction in progress (CIP)?". Simplestudies.
 | This accounting-related article is a stub. You can help Wikipedia by expanding it. |