Capital Work in Process Overview
Capital Work in Process (CWIP) is a holding account that records costs incurred during the design and construction of capital assets. The work in process could be a new capital asset or an addition to an existing capital asset. Costs are accumulated and displayed with a CWIP status until the capital asset is usable. CWIP accounts are integral parts of the asset inventory.
Use of CWIP
CWIP accounts display the accumulation of costs incurred, costs absorbed, costs apportioned during construction, and capital work that is in process. When you set up CWIP, CWIP job ledger entries are automatically created during transactions. For more information, see How to: Set Up Capital Work in Process. You can also generate various reports for CWIP. For more information, see How to: Print Capital Work in Process Reports.
Accumulation of Costs in CWIP Accounts
The costs accumulated in a CWIP account may be related to a single asset or multiple assets. These costs are transferred to the capital or fixed assets that can be identified and put to use in business operations. The following are some instances for accumulation of costs in CWIP accounts:
For supply and building contracts, the value of supplies received and accepted at the site is treated as CWIP.
Expenses accrued during construction, including corporate office expenses, are apportioned to CWIP based on accrual.
Deposit work and cost-plus contracts that are received from the contractors based on the statements of account.
Claims for price and exchange rate variation of contracts if the contracts are accounted for on acceptance.
The costs incurred for each element of an asset during construction. The total accumulated cost in CWIP is recorded in the asset inventory as recorded cost. The recorded cost in the asset inventory must match the CWIP amount in the general ledger for the asset. If account balances differ, you must reconcile the accounts. For more information, see Reconcile Bank Accounts.
The actual costs of the assets. These values are used to establish the acquisition cost or improvement cost of the asset in the asset inventory.
Transactions
After setting up and validating CWIP during transactions, CWIP job ledger entries are automatically created during transactions in the following documents:
Purchase orders
Purchase credit memos
Purchase return orders
Job journals
Job general ledger journals
Reports
Microsoft Dynamics NAV provides the following CWIP reports.
| Report | Description |
|---|---|
CWIP |
Displays the details for remaining CWIP labor, material, and overhead amounts for a particular job number and job task number. |
CWIP Register |
Displays the details for remaining CWIP labor, material, and overhead amounts with usage and total cost for a particular job number and job task number. |
CWIP Transaction Detail |
Displays the details for remaining CWIP labor, material, and overhead amounts with usage and total cost for a particular job number and job task number. |
Capitalized CWIP |
Displays the allocation amounts for labor, materials, and overhead amounts that have been capitalized in a fixed asset. |
For more information, see How to: Print Capital Work in Process Reports.
See Also
Tasks
How to: Set Up Capital Work in Process
How to: Create Capital Work in Process Transactions for Purchase Documents
How to: Print Capital Work in Process Reports
Concepts
Other Resources
Creating Purchase Orders Manually
Creating Purchase Credit Memos
Creating a Purchase Return Order
Job Journal
Job Ledger Entries
Reconcile Bank Accounts