How to record capitalized feasibility study
Record the cost of feasibility studies that are directly attributable to the creation of a specific fixed asset.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Fixed Assets - CWIP | Asset | 7,500.00 | - |
| Cash | Asset | - | 7,500.00 |
💡 Accountant's Note
Costs incurred during the development stage that are essential for the asset's construction are capitalized into Construction in Progress.
Practitioner & Systems Framework
💻 ERP Architecture
Link the CWIP account to a specific project code in the asset module for eventual capitalization.
⚠️ Audit Flags
Feasibility studies for projects that are eventually abandoned must be expensed immediately.
📄 Required Documentation
Project scope, feasibility report, and proof that the asset is probable of being constructed.
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