Accounting for Capital Projects: Assets Under Construction, Capitalisable vs Expensed Costs, Borrowing Costs, Commissioning & Transfer to the Asset Register

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Build the budget report of a fictional factory project from its transaction log: actual cost and open commitments per category with SUMIFS, the budget left and the share of the budget already used.
• Look up the treatment of twelve fictional project costs in a capitalisation policy table, compute the amounts that belong in assets under construction, the capitalised and expensed totals and the number of lines that were posted against the policy.
• Build the monthly AUC ledger of a fictional project from its capitalised invoices: additions per month with date conditions, opening and closing balances, and a reconciliation to the project report that finds the months that do not agree.
• Compute the borrowing costs a fictional policy allows to capitalise on a project: the days each payment was outstanding, the weighted spending, the interest at a fictional rate and the cap at the interest that was really paid.
• Project the final cost of each cost category of a fictional project from its actual cost and percentage complete, compute the cost to complete, the variance against budget, an approval flag with IFS and the overrun the contingency cannot cover.
• Split the final AUC cost of a fictional hall into five components in proportion to the contractor's breakdown, look up each component's useful life in a policy table and compute the annual straight-line depreciation.
• Start depreciation on the right date under a fictional policy: count the months in the first year from the available-for-use date, compute annual and pro-rata depreciation per component for the first three years and the net book value at the end of year three.
• Close the file of a fictional capital project: transfer the components to the asset register, check what is left in AUC, summarise capitalised and expensed spend per category and chart the result.