Construction in Progress CIP
Definition: Asset under construction; not yet depreciated
NarrowModerate
Asset under construction; not yet depreciated
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Record construction costs | ||
| Pay $250,000 toward new building. | ||
| Construction in Progress | $250,000 | |
| Cash | $250,000 | |
| Costs accumulated in CIP until project is complete. | ||
| 2. Place asset in service | ||
| Building finished; total cost $750,000. | ||
| Buildings | $750,000 | |
| Construction in Progress | $750,000 | |
| CIP reclassified to depreciable asset. Depreciation begins. | ||
DurationLong-Term
External Links
- Construction in progress — Wikipedia